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Tuesday 5 December 2017
The Justice Department’s Antitrust Division Attends Organisation for Economic Co-operation and Development (OECD) MeetingsRead the Press Release
A delegation from the U.S. DOJ Antitrust Division, including Deputy Assistant Attorney General Roger Alford, is attending meetings of the OECD Competition Committee in Paris this week.
The OECD Competition Committee, which includes 35 member countries and the European Union, as well as non-member participants, experts and other invitees, brings together leaders of the world’s major competition authorities for a dialogue on competition policy issues, including best practices and standards, and promotes market-oriented reforms.
Among the panels scheduled for this week’s meeting are the extraterritorial reach of remedies in antitrust cases, the role of safe harbors and presumptions in antitrust law, and emerging issues related to common ownership by institutional investors. The U.S. submissions on these topics, as well as the submissions by other OECD members, are available on the OECD Competition Committee’s website at http://www.oecd.org/daf/competition/roundtables.htm.
The Justice Department and Environmental Protection Agency Reach Agreement with Husqvarna to Resolve Production Line Test Reporting ViolationsRead the Press Release
Swedish company Husqvarna AB and its U.S. affiliate, Husqvarna Consumer Outdoor Products N.A., Inc., have agreed to pay a $2.85 million civil penalty to resolve alleged violations of the Clean Air Act, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.
The agreement is a result of Husqvarna’s failure to provide EPA with complete and accurate emissions testing information relating to engines used in handheld lawn, garden and forestry equipment manufactured during the 2011-2013 period. Today’s agreement, filed with the Federal District Court in the District of Columbia, requires Husqvarna to pay a $2.85 million civil penalty.
As a result of EPA’s investigation, Husqvarna agreed to reduce its emission credit balance by approximately 1,700 tons and improve quality assurance measures related to manufacturing, testing and reporting emissions from outdoor power products, such as trimmers, leaf blowers, and chainsaws. Consumers and professional users of these products, which are sold under various brand names, will benefit from reductions in emissions from products the company sells in the future.
“This settlement demonstrates the Department’s commitment to enforcing federal clean air laws,” said Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division. “Working with our partners at EPA, we will continue to uphold the integrity of emissions testing programs to ensure clean air for the American people.”
“As a result of this investigation, Husqvarna’s products will produce less air pollution, which means cleaner air for consumers and American communities,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to both making sure internal combustion engines perform as designed and holding accountable manufacturers who fail to properly test or report how much air pollution those engines emit.”
Engines sold in the United States must meet applicable emission standards for hydrocarbon and oxides of nitrogen, both ozone precursors. To demonstrate compliance with these standards, manufacturers must perform “production line testing” on a select number of engines from each “engine family” to verify that engines within the engine family as a whole meet the applicable emission standards. Manufacturers must then report certain information to EPA about their production line testing.
During an audit of Husqvarna’s production line testing reports conducted by EPA’s Office of Transportation and Air Quality and a subsequent investigation by EPA’s Office of Enforcement and Compliance Assurance, EPA found pervasive errors in the way Husqvarna was determining the minimum number of engines to test and the way Husqvarna was determining whether engine families were meeting the applicable emission standards. In all, EPA determined that Husqvarna submitted incomplete and inaccurate production line testing reports for 119 separate engine families.
Husqvarna is the largest manufacturer of handheld engines and equipment for the U.S. market. Husqvarna manufactures and tests its handheld lawn, garden and forestry equipment in Huskvarna, Sweden and Nashville, Arkansas, and its United States headquarters is located in Charlotte, North Carolina.
For more information, go to https://www.epa.gov/enforcement/husqvarna-ab-and-husqvarna-consumer-outdoor-products-na-inc-clean-air-act-settlement.
Terre Haute Federal Correctional Officer faces multiple bribery and permitting escape chargesRead the Press Release
Alleged to have taken bribes to allow prisoners to escape the prison grounds,
have sex on prison property, and introduce contraband into prison
PRESS RELEASE
Terre Haute – United States Attorney Josh Minkler today announced federal criminal charges against a Bureau of Prisons (BOP) correctional officer involved in an elaborate scheme to allow inmates to leave the grounds, have sexual relations on the grounds, and bring contraband into the prison in exchange for cash and other items. Leon Perry III, age 41, Linton, was arrested today and faces charges that include, conspiracy for an officer to permit escape, conspiracy to bribe public officials, officer permitting escape, public official accepting a bribe and providing contraband in a prison.
“Mr. Perry put the safety and welfare of the inmates, correctional officers, the institution and the entire Terre Haute community in jeopardy by allowing this to occur,” said Minkler. “He allowed greed and power to betray the confidence we place in prison officials.”
The Federal Correctional Institution (FCI) is a medium-security prison for men operated by the Bureau of Prisons. Adjacent to the FCI is a minimum-security satellite camp, with no perimeter fencing commonly referred to as the Camp. Inmates at the Camp are generally permitted to roam the grounds but are forbidden from leaving without prior approval.
During the time referenced in the indictment, Perry worked as the Reservation Patrol Officer at the Federal Prison Camp, whose responsibilities included patrolling the prison grounds to prevent and stop any escape attempts. This included challenging unauthorized vehicles or persons who are on the grounds and maintaining overall security of the facility. Perry has served as a correctional officer at the BOP for approximately 10 years.
It is alleged that Perry agreed to be at a different part of the facility grounds when inmates left the facility and went with women to hotels in the nearby Terre Haute, Indiana area. In exchange for the agreement, Perry accepted cash bribes. It is further alleged that Perry accepted bribes, including cash and prescription medication, to allow prisoners to have sex with unauthorized visitors on prison grounds. It is also alleged that Perry accepted bribes in exchange for allowing contraband into the Camp; including cellular telephones, controlled substances, and alcohol.
"Corruption by law enforcement officers in any facet of their work won't be tolerated," said W. Jay Abbott, Special Agent in Charge of the FBI's Indianapolis Division. "The illegal actions by the few corrupt officers undermine the public's confidence in the majority of law enforcement officers who are trustworthy public servants."
“Greed and corruption have no place in our criminal justice system,” stated Special Agent in Charge John F. Oleskowicz of the DOJ Office of the Inspector General’s Chicago Field Office. “We want to thank our law enforcement partners for their assistance in ensuring that correctional officers who abuse their position are vigorously investigated and prosecuted.”
This case was investigate by the Federal Bureau of Investigation, U.S. Department of Justice Office of the Inspector General and the BOP Special Investigative Services.
According to Assistant United States Attorney Kyle M. Sawa who is prosecuting this case for the government, Perry faces up to 15 years imprisonment if convicted on all counts.
An indictment is merely a charge and not evidence of guilt. All defendants are considered innocent until proven guilty in federal court.
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Syracuse Woman Sentenced to 60 Years on Child Exploitation ConvictionsRead the Press Release
SYRACUSE, NEW YORK - Emily Oberst, age 25, of Syracuse, was sentenced today to 60 years in prison for her sexual exploitation of children, announced Acting United States Attorney Grant C. Jaquith and Special Agent in Charge Vadim D. Thomas of the Federal Bureau of Investigation Albany Field Office. Oberst, who pled guilty to one count of conspiracy to sexually exploit children and 11 counts of child exploitation, will also be on a lifetime term of supervised release and must register as a sex offender following her release from prison.
“The substantial sentence imposed today reflects the enormity of the defendant’s appalling sexual exploitation of an infant and a toddler. We will continue to use all available tools to hold child predators accountable so that all children can be safe from such abominable abuse,” said Acting U.S. Attorney Grant C. Jaquith.
“Ms. Oberst committed shocking and unspeakable crimes against the most innocent among us. Today’s sentencing ensures that she will receive justice for her heinous crimes,” said FBI Special Agent in Charge Vadim D. Thomas.
During her April 2017 guilty plea, Oberst admitted that she took sexually explicit images of two girls, an infant and a 4-year old, and sent those images to her co-defendant Jason Kopp. Jason Kopp previously pled guilty to a 28-count indictment charging conspiracy to sexually exploit children, child sexual exploitation, and other child pornography offenses. On September 13, 2016, he was sentenced to serve 235 years in prison.
This case was investigated by the Albany Field Office of the FBI (Syracuse Resident Agency), the New York State Police and the Metropolitan Police Department-Federal Bureau of Investigation Child Exploitation Task Force (Washington Field Office), and was prosecuted by Assistant U.S. Attorneys Lisa Fletcher and Robert Levine.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
State Corrections Officer Sentenced for Smuggling Drugs and Cell Phones into the J.T. Vaughn Correctional CenterRead the Press Release
WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced that Thomas N. Boyce, Jr., age 51, of Dover, Delaware, was sentenced today by U.S. District Court Judge Richard G. Andrews to 36 months incarceration. Boyce previously had pled guilty to three counts of conspiracy to commit extortion under color of official right. Boyce is scheduled to surrender on January 2, 2018.
According to statements made at sentencing and in documents filed in court, Boyce served as Corrections Officer (“CO”) at the J.T. Vaughn Correctional Center (“JTVCC”) for twenty years, until 2015. In 2013 and 2014, Sergeant Boyce smuggled drugs, to include heroin, and cell phones to 16 different JTVCC inmates in return for money. Boyce did so knowing those inmates were using the smuggled cell phones to orchestrate the smuggling of drugs and more phones into JTVCC.
Following the sentencing, Acting U.S. Attorney Weiss, stated, “The defendant was charged with keeping JTVCC safe. Instead, he committed an abuse of trust that made the prison manifestly less safe - where his charge was to protect the inmates and his colleagues, the defendant’s prison smuggling endangered them. My office is committed to investigating and prosecuting corrupt prison employees. Today’s sentence should serve as a deterrent for correction officers who would smuggle contraband into a prison.”
“Few things threaten our society more than public servants who betray their oath for personal gain,” said Special Agent in Charge Gordon B. Johnson of the FBI's Baltimore Division. “The FBI in Delaware, along with our state and federal partners, are sending a strong message today that we will not tolerate corruption in the prison system which tarnishes the good work of the dedicated and committed correctional employees.”
This matter resulted from a joint investigation conducted by the FBI and the Delaware Department of Correction. The case was prosecuted by Assistant U.S. Attorney Edmond Falgowski.
Stamford Man Pleads Guilty to Federal Cocaine ChargeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that RICHARD ROTANTE, 57, of Stamford, waived his right to be indicted and pleaded guilty today before Chief U.S. District Judge Janet C. Hall in New Haven to one count of possession with intent to distribute 500 grams or more of cocaine.
According to court documents and statements made in court, on August 18, 2017, Stamford Police arrested ROTANTE on the basis of three sales of cocaine that ROTANTE had made to an individual cooperating with law enforcement. On that date, a search of ROTANTE’s person, residence and two of his vehicles revealed approximately 1.5 kilograms of cocaine, items used to process and package narcotics, and $68,923 in cash.
Chief Judge Hall scheduled sentencing for February 28, 2018, at which time ROTANTE faces a maximum term of imprisonment of 40 years. ROTANTE is released on a $150,000 bond pending sentencing.
ROTANTE has a previous federal conviction for distributing cocaine. On April 25, 2007, he was sentenced in New Haven federal court to 12 months and one day of imprisonment, eight months of home confinement, and a fine of $3,500.
This matter is being investigated by the Stamford Police Department and the Federal Bureau of Investigation, with the assistance of the Stamford State’s Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Sarah Karwan.
Special Counsel’s Office Statement of Expenditures: May 17, 2017 – Sept. 30, 2017Read the Press Release
Please find the link to the Special Counsel’s Office Statement of Expenditures, May 17, 2017 to September 30, 2017 here. This statement has also been provided to the Senate Committee on the Judiciary and the House Committee on the Judiciary.
As required by regulation, the Special Counsel, with the assistance of the Department’s Justice Management Division, developed a proposed budget, which was then reviewed and approved by the Deputy Attorney General. The Statement reflects the Special Counsel’s spending within the approved budget. Consistent with past practice, the Statement showing actual spending is being made public today.
The Justice Management Division will conduct a similar review every six months. The next Statement of Expenditures will be released after March 31, 2018.Sex Trafficker Sentenced to 20 Years in Federal PrisonRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated today that Alandis Patterson, a/k/a “Vino,” age 33, of Greenville, South Carolina was sentenced in federal court in Greenville for conspiracy to commit sex trafficking by means of force and threats of force, in violation of Title 18, U.S.C. § 1594(c). United States District Judge Bruce Howe Hendricks of Charleston sentenced Patterson to 240 months imprisonment, followed by a Life term of supervised release, and $50,000 in restitution to the victim.
Evidence presented at the change of plea and sentencing hearings established that Patterson exploited an 18 year old girl, getting her hooked on cocaine and heroin, and beating her on an almost a daily basis to force her to have sex with numerous “Johns” a night from 2013 through the late fall of 2015. Patterson would beat the victim when he believed she wanted to leave, when she did not make enough money, or if he believed she was taking any of the money because 100% of the prostitution proceeds went to him. While Patterson did not use heroin himself, rather he used the drug to control the victim, making her “into a slave” for him. Patterson discussed the tactic with another pimp, explaining that girls were easier to control when they were addicted to drugs. The victim was finally able to break free from the defendant when he went to jail for a short time on unrelated charges, and she was able to withdraw from heroin. When the defendant got out of jail, shortly thereafter, she told him that she was leaving him for the last time. On that day, Patterson beat and choked the victim so severely she had to be treated in the hospital for bruises and swelling to her head and body and a possible concussion.
Ms. Drake stated, “The first step to eradicating human trafficking is to hold the traffickers accountable. While the defendant in this case threatened the victim by telling her his name, ‘VINO,’ stood for ‘Vengeance Is Never Over,’ the sentence in this case sends a clear message to the contrary: ‘the Violence Is Now Over.’ Those who traffic in sex need to take notice that our office, along with our federal and state law enforcement partners, will continue to aggressively investigate and prosecute all those who operate in this destructive field.”
The case was investigated by agents of the FBI, ATF, City of Spartanburg Police Department, Greenville County Sheriff’s Office, and Charleston County Sheriff’s Office. Assistant United States Attorney Jamie Lea Schoen and Carrie Fisher Sherard of the Greenville office prosecuted the case.
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Senior Member of Drug Trafficking Organization Sentenced to 12 Years in Prison for Conspiring to Sell Heroin in New JerseyRead the Press Release
TRENTON, N.J. – A senior member of a large-scale drug trafficking organization was sentenced today to 12 years in prison for distributing heroin in Ocean and Monmouth Counties and elsewhere in New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Robert Britt, a/k/a “True,” 45, of Asbury Park, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an indictment charging him with conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
Between March and May 2014, 21 other individuals, including numerous members of the drug trafficking organization, were charged in two separate criminal complaints with conspiring to distribute heroin and other related offenses. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after two of its leading members, Britt and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.”
According to documents filed in the case and statements made in court:
Between July 2010 and March 2014, Britt conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. During his plea hearing, Britt admitted that he distributed between one and three kilograms of heroin in furtherance of the conspiracy and that he served as a manager or supervisor of the conspiracy.
In addition to the prison term, Judge Sheridan sentenced Britt to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI Red Bank Resident Office, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Nicholas Grippo and Brendan Day of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense Counsel: Alyssa A. Cimino Esq., Fairfield, New Jersey
Pittsburgh Man Sentenced to 5 Years in Prison for Attempting to Possess Designer DrugRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to 60 months imprisonment followed by three years supervised release on his conviction of violating federal narcotics laws, Acting United States Attorney Soo C. Song announced today.
United States District Judge Nora Barry Fischer imposed the sentence on John Calabro, 24, of Pittsburgh, Pennsylvania.
According to information presented to the court, in and around May 2015, Calabro attempted to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of ethylone, a Schedule I controlled substance.
Assistant United States Attorney Katherine A. King prosecuted this case on behalf of the government.
Acting United States Attorney Song commended Homeland Security Investigations, Customs and Border Protection, and the Pennsylvania State Police for the investigation leading to the successful prosecution of Calabro.
Oroville Man Sentenced to 14 Years in Prison for Receiving Child Pornography from the Dark WebRead the Press Release
SACRAMENTO, Calif. — Jason Sebastian Sparks, 29, of Oroville, was sentenced today by U.S. District Judge John A. Mendez to 14 years in prison, followed by 15 years of supervised release, for receipt of child pornography, U.S. Attorney Phillip A. Talbert announced.
U.S. Attorney Talbert stated: “This sentence sends a strong message to those who try to remain anonymous while committing child exploitation crimes on the Internet that no matter what techniques they use, they risk being caught and prosecuted. Law enforcement is continually developing new ways to detect such criminals and bring them to justice. My office is committed to protecting the most vulnerable members of our society and to working with our state, local, and federal law enforcement partners to prosecute those involved with the exploitation of children.”
“Victims of child pornography aren’t just pixels on a screen,” said Sean Ragan, Special Agent in Charge of the FBI Sacramento Field Office. “They are real children subject to horrific abuse. The internet may provide users with a veil of anonymity, but the FBI and our partners will overcome challenges to track down offenders and bring justice to innocent victims.”
According to court documents, this case arose from an FBI undercover investigation into Playpen, a highly sophisticated, hidden website dedicated to the advertisement and distribution of child pornography that operated on the Tor network from August 2014 until March 2015. The Tor network offers users anonymity by concealing the actual Internet Protocol (IP) address of its users. In February 2015, the FBI seized the computer server hosting Playpen from a webhosting facility in North Carolina. Pursuant to a federal court order in the Eastern District of Virginia, the website operated under FBI supervision for a two-week period, during which the FBI collected information to identify users of Playpen.
Playpen had more than 150,000 members who created and viewed tens of thousands of postings related to the sexual abuse of children. Images and videos shared through the site were highly categorized according to victim age and gender, as well as the type of sexual abuse depicted in the various images. The site also included discussion forums that included tips for grooming children and avoiding detection by law enforcement.
During its investigation, the FBI determined that a user connected to an IP address operating at Sparks’ Oroville residence had accessed Playpen for approximately three hours and 13 minutes over a two-day period in March 2015. Investigators subsequently searched Sparks’ residence and seized a computer that Sparks used to download child pornography from the Tor network. In a statement to investigators, Sparks admitted to accessing Playpen and to using the Tor network to download child pornography. Sparks also admitted that he had previously sexually abused an approximately six-year-old child on five occasions.
As a result of the FBI’s operation, at least 350 U.S.-based individuals have been arrested nationwide, 25 producers of child pornography have been prosecuted, 51 alleged hands-on abusers have been prosecuted and 55 American children who were subjected to sexual abuse have been identified or rescued.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Shelley Weger is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Oregon Man Receives 24-Month Federal Prison Sentence for Failing to Register as a Sex OffenderRead the Press Release
EUGENE, Ore. – On Tuesday, December 5, 2017, U.S. District Court Judge Ann L. Aiken sentenced Michael Schmidt to 24 months in federal prison followed by five years of supervised release. Schmidt had previously pleaded guilty to a single charge of failing to register as a sex offender on September 6, 2017.
According to court documents, Schmidt was convicted of first-degree rape and kidnapping on October 10, 1997 in Lane County, Oregon and was required to register as a sex offender for life. He fled the state during his post-prison supervision, failing to complete a sex offender treatment program. Schmidt was located, arrested, and indicted for failing to register as a sex offender in the Northern District of Indiana. His case was later transferred to the District of Oregon.
“Sex offender registration serves the dual purpose of protecting the community from violent criminals and helping sexual offenders successfully avoid recidivism,” said Billy J. Williams, United States Attorney for the District of Oregon. “Deliberately avoiding registration is a serious crime and will be punished accordingly.”
The case was investigated by the United States Marshals Service and prosecuted by Jeffrey S. Sweet, Assistant United States Attorney for the District of Oregon, and Stacey R. Speith, Assistant United States Attorney for the Northern District of Indiana.
One Physician and Three Nurse Practitioners Charged for Participating in the Operation of a Montgomery “Pill Mill”Read the Press Release
Montgomery, Ala. – On Tuesday, December 5, 2017, four individuals were arrested after being indicted by a federal grand jury for their role in operating a “pill mill,” out of a Montgomery, Alabama medical office, announced United States Attorney Louis V. Franklin, Sr. A “pill mill” is a medical clinic that is dispensing controlled substances inappropriately, unlawfully, and for non-medical reasons.
Those four individuals were: (1) Lillian Akwuba, 38, a nurse practitioner residing in Montgomery; (2) Julio Delgado, 55, a physician residing in Homewood, Alabama; (3) Steven Cox, 62, a nurse practitioner residing in Tallassee, Alabama; and (4) Elizabeth Cronier, 69, a nurse practitioner residing in Montgomery.
The indictment alleges that each defendant worked at Family Practice, located at 4143 Atlanta Highway in Montgomery with Dr. Gilberto Sanchez, previously a Montgomery physician, who owned Family Practice. Last week, Dr. Sanchez pleaded guilty in federal court to drug distribution, health care fraud, and money laundering charges.
The indictment in this case alleges that the defendants conspired with Dr. Sanchez to unnecessarily and illegitimately prescribe controlled substances to the patients of Family Practice. Additionally, the indictment charges the defendants with committing health care fraud by causing insurance companies to be billed for unnecessary office visits. The only purpose of those visits were to refill unnecessary medications. Lastly, the indictment alleges that Akwuba conspired with Dr. Sanchez to launder money.
If convicted, each defendant faces a maximum sentence of 20 years imprisonment on the drug conspiracy and distribution counts. They face maximum sentences of 10 years imprisonment on the health care fraud counts. Akwuba faces a maximum sentence of 10 years imprisonment on the money laundering counts. All defendants also could be assessed substantial fines and other monetary penalties.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
This case is being investigated by the Drug Enforcement Administration’s Tactical Diversion Squad, the Internal Revenue Service’s Criminal Investigation Division, and the United States Department of Health and Human Services – Office of Inspector General. The Montgomery County, Alabama Sheriff’s Office, the Alabama Board of Medical Examiners, the Montgomery, Alabama Police Department, and the Opelika, Alabama Police Department assisted with this case. Assistant United States Attorneys Jonathan S. Ross and R. Rand Neeley are prosecuting the case.
North Tonawanda Woman Indicted for Possession with Intent to Distribute Synthetic DrugsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051Buffalo, N.Y. –U.S. Attorney James P. Kennedy, Jr. announced today that Brenda Mansour, 20, of Buffalo, NY, pleaded guilty to a misdemeanor charge of introducing into interstate commerce a misbranded food before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of one year in prison and a fine of up to $100,000.
Assistant U.S. Attorney Brendan T. Cullinane, who is handing the case, stated that in May of 2015, New York State Department of Taxation and Finance inspectors encountered the defendant at Mario’s, a store located at 2304 Pine Avenue in Niagara Falls, during a routine inspection of the store’s tobacco and cigarette inventory. The inspectors recovered 331 packages of suspected synthetic cannabinoids, which were labeled either “Geeked Up,” “Scooby Snax (Watermelon),” “Scooby Snax (Bluberry),” “Scooby Snax (Green Apple),” “Xtreme Aroma Therapy (Strawberry),” “Xtreme Aroma Therapy (Brandy),” or “Joker.” The inspectors turned over the packages to Special Agents from Homeland Security Investigations for further analysis. HSI confirmed that Mansour offered for retail sale packages containing a green vegetable matter laced with chemicals not authorized for human consumption, including AB-FUBINACA and XLR-11, both of which are Schedule I controlled substances. The defendant sold these packages knowing that customers intended to inhale, ingest, or burn the contents contained in the packages.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Kevin Kelly, and the New York State Department of Taxation and Finance, under the direction of Commissioner Jerry Boone.
Sentencing is scheduled for April 4, 2018, at 12:30 p.m. before Judge Arcara.
North Carolina Woman Pleads Guilty to Tax ChargeRead the Press Release
Roanoke, VIRGINIA – A woman who participated in a fraudulent cosmetics sales scheme was sentenced this afternoon on federal tax charges, United States Attorney Rick A. Mountcastle announced.
Charon Ray, a.k.a. “Charon Crowely,” 47, of High Point, North Carolina, was sentenced today to three years’ probation, nine months of which must be spent on home confinement. In addition, Ray was ordered to pay a fine of $40,000. She previously pleaded guilty to one count of filing a false tax return.
According to evidence presented during the guilty plea hearing, Ray operated an online cosmetic sales business out of her residence during the years 2009, 2010, 2011, 2012, 2013 and 2014. Ray obtained cosmetics from a disposal company and then repurposed them for sale through electronic sales channels such as eBay. The Internal Revenue Service examined Ray’s financial records for the relevant time period. There is a substantial known tax loss that RAY caused, $455,109, by not reporting $1,625,389 of income received by selling used and returned cosmetic products.
As part of her plea agreement in this case, in 2017 Ray filed amended tax returns for each of tax years 2009 through 2014, included in returns were payment of taxes and other amounts due. The defendant paid $590,019 for the tax periods 2009 through 2014.
The investigation of the case was conducted by the Internal Revenue Service. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Nashville Gang Member Pleads Guilty to Federal Crimes After Shooting at Metro Police OfficersRead the Press Release
Antonio L. Bender,19, of Nashville, Tenn., pleaded guilty today in U.S. District Court to federal firearms charges and obstruction of justice, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. These charges resulted from an incident on March 27, 2017, where Bender shot at two Metropolitan Nashville Police Department officers who were responding to a report of shots being fired.
Bender was indicted by a federal grand jury on May 10, 2017, on charges of being an unlawful drug user in possession of two firearms; possession of a stolen firearm; and obstruction of justice by deleting relevant social media posts with intent to impede a federal investigation. He pleaded guilty to all charges and will be sentenced by U.S. District Judge Aleta Trauger on March 26, 2018.
U.S. Attorney Don Cochran commended the MNPD officers and stated, “These officers were doing their duty to investigate violent crime which has plagued this community when they were shot at by this defendant. They displayed appropriate restraint in not returning fire due to their training and their awareness of the innocent bystanders in the area. In keeping with our zero-tolerance policy regarding violence against law enforcement officers, we will seek an appropriately severe sentence against this illegally armed violent gang member.”
According to the statement of facts presented at the plea hearing, Bender is a Rollin’ 60s Crips gang member and was released from juvenile custody in October 2016. On March 27, 2017, MNPD officers were responding to a report of shots being fired in the area of the J.C. Napier and Tony Sudekum public housing developments. As they were patrolling, two officers heard more gunfire and got out of their patrol car to investigate. While on foot, they heard four to five more shots before seeing Bender, who was armed with two pistols, which were equipped with a laser and a flashlight. Bender raised the pistols towards the officers, fired once, and then fled on foot. The officers did not return fire because there were bystanders behind Bender, and they could not fire without endangering them.
The officers chased Bender, who surrendered a short distance away, after discarding the two pistols, a Glock .40 caliber semi-automatic and a Smith & Wesson .40 caliber semi-automatic, which had previously been reported stolen.
Also according to the statement of facts, Bender is an unlawful drug user and he had taken both pistols from an unknown man selling firearms a few weeks earlier. He was involved in a shooting earlier in the day on March 27, 2017, in which he shot a person who had sold one of his associates some fake cocaine. Multiple other shots struck and heavily damaged an occupied car nearby.
Bender faces a maximum of ten years in prison on each of the firearms charges, and a maximum of 20 years in prison for obstruction of justice.
This case was investigated by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
Mission Woman Found Not Guilty of Bank Fraud and ForgeryRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, woman was acquitted of Bank Fraud and Forgery as a result of a federal jury trial in Pierre, South Dakota, on November 30, 2017.
Kaitlyn Erickson, age 21, was indicted by a federal grand jury on March 15, 2017.
The charge stemmed from an alleged incident that occurred in January 2017, in Mission.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The U.S. Attorney’s Office prosecuted the case.
Mexican citizen sentenced to 33 months in prison for illegally reentering the United StatesRead the Press Release
SHREVEPORT, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a Mexican citizen was sentenced last week to 33 months in prison for reentering the United States illegally after being previously removed.
Marco Grijalva-Lopez, 34, of Mexico, was sentenced Friday by U.S. District Judge Elizabeth E. Foote on one count of illegal reentry of a removed alien. According to the August 9, 2017 guilty plea, Bossier City police arrested the defendant for shoplifting on April 14, 2017. After further investigation, law enforcement agents discovered that Grijalva-Lopez had two prior convictions for assault of a family member in Harris County, Texas. He was removed on May 30, 2015 and banned for life from entering the United States.
United States Immigration and Customs Enforcement and the Bossier City Police Department conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
Mexican citizen pleads guilty to illegally reentering the United StatesRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that a man from Mexico pleaded guilty to reentering the United States after being deported.
Tomas Tavera-Morales, 31, of Mexico, pleaded guilty before U.S. Magistrate Judge Carol Whitehurst to one count of illegal reentry of a previously deported alien. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, the Acadia Parish Sheriff’s Office contacted Homeland Security Investigations on August 21, 2017 for assistance surveilling a possible illegal alien. Law enforcement agents later observed Tavera-Morales walking behind a residence near Third and Eastern avenues in Crowley. Agents contacted him, and he identified himself using a different name. After his arrest, he admitted that he lied about his name, and that he had been previously deported.
Tavera-Morales faces up to two years in prison, one year of supervised release and a $250,000 fine. The court set sentencing for March 18, 2018.
Homeland Security Investigations and Acadia Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney David J. Ayo is prosecuting the case.
Medical Doctor Found Guilty of Illegally Writing Prescriptions for Controlled Substances, including Highly Addictive OpioidsRead the Press Release
LOS ANGELES – A doctor who operated a medical clinic in Lynwood has been found guilty of drug-trafficking charges after a federal jury found that he issued prescriptions for powerful narcotics and sedatives without a medical purpose for mostly young “patients” who sometimes traveled more than 100 miles to get prescriptions.
Dr. Edward Ridgill, 65, who has residences in Whittier and Newbury Park, was found guilty late yesterday afternoon of 26 felony counts of illegally distributing controlled substances.
The evidence presented during a one-week trial showed that Ridgill illegally prescribed the opioid painkiller hydrocodone, which is often sold under the brand name Norco; alprazolam, best known by the brand name Xanax; and carisoprodol, a muscle relaxer often sold under the brand name Soma.
Prosecutors presented evidence at trial from a California database that tracks prescriptions and “confirms [Ridgill]’s predatory prescribing,” according to court documents that describe young “patients” traveling from Victorville, Palmdale and Desert Hot Springs to obtain prescriptions.
The jury heard that, in 2014 alone, Ridgill wrote nearly 9,000 prescriptions, and 95 percent of those prescriptions were for hydrocodone, alprazolam and carisoprodol, typically for the maximum strength. “The combination of these three drugs is the most sought-after drug cocktail on the black market, and one for which there is no legitimate medical purpose,” prosecutors said in a court filing.
Jurors in the case heard testimony about undercover DEA operatives who received prescriptions from Ridgill in exchange for cash. According to court documents, the testimony showed that Ridgill’s “initial physical exams were cursory, and far from the fulsome type of exam required to justify prescribing high doses of controlled substances.”
Law enforcement authorities executed federal search warrants on Ridgill’s residences and medical office in March 2015. At that time, authorities recovered multiple pre-written prescriptions for controlled substances, as well as cash found lining patient files and stuffed in the drawers containing those files, which prosecutors argued demonstrated that Ridgill operated a cash-for-drugs business.
The jury deliberated for about 30 minutes before finding Ridgill guilty of 26 counts of distributing controlled substances outside the course of professional practice and without a legitimate medical purpose. Specifically, Ridgill was convicted of 13 counts of distributing hydrocodone, nine counts of distributing alprazolam, and four counts of distributing carisoprodol.
Ridgill is scheduled to be sentenced on March 19 by United States District Judge S. James Otero. As a result of yesterday’s verdicts, Ridgill faces decades in federal prison, including up to 20 years in prison for six of the counts related to distributing hydrocodone.
The investigation into Ridgill was conducted by the Drug Enforcement Administration’s Tactical Diversion Squad, HIDTA (the Los Angeles High Intensity Drug Trafficking Area), the Los Angeles Police Department, the Torrance Police Department and IRS-Criminal Investigation.
The prosecution of Ridgill is being handled by Assistant United States Attorneys Catharine A. Richmond and Catherine S. Ahn of the General Crimes Section.
Man Sentenced for Possession of a Firearm by a Felon Charge Related to Shooting in TarboroRead the Press Release
GREENVILLE – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr. announced that today in federal court, Senior United States District Judge Malcolm J. Howard sentenced RAMEIK DESEN ANDERSON, 23, to 96 months of imprisonment followed by 3 years of supervised release.
ANDERSON was named in a 1-count Indictment filed on June 15, 2017. On September 11, 2017, ANDERSON subsequently pled guilty to one-count of Possession of a Firearm and Ammunition by a Felon.
The evidence developed during the investigation showed that on Wednesday, January 4, 2017, at 5:30 a.m., ANDERSON fired multiple rounds from a 9mm handgun at an occupied residence in Tarboro, North Carolina. Shortly after fleeing the residence, ANDERSON was observed by an officer with Tarboro Police Department (TPD) running a red light and traveling at a high rate of speed away from the area. The officer attempted to conduct a traffic stop on the vehicle; however, ANDERSON refused to stop, and a vehicle pursuit ensued with the officer operating his lights and siren. ANDERSON lost control of the vehicle and crashed the vehicle into a ditch. ANDERSON then jumped out of the vehicle and fled on foot. ANDERSON was eventually apprehended and arrested after utilizing a K-9 and several officers to assist in searching the nearby wooded area.
There were three other occupants in the vehicle at the time of the vehicle crash. All three occupants were interviewed at the crash site and were consistent with their statements that ANDERSON was driving the vehicle and that they were fleeing the scene of a shooting. Each occupant stated that ANDERSON pulled into the residence, exited the vehicle, and began firing multiple rounds into the home. A search of the vehicle recovered a 9mm handgun (with an obliterated serial number and later determined to be stolen), and a .38 caliber handgun. Both firearms were loaded with live ammunition. The 9mm was jammed with a spent round lodged into the ejection port of the firearm. Additionally, a spent bullet casing was found on the driver’s side floorboard.
Officers responded to the shooting scene and recovered 11 spent rounds and one unspent 9mm round from the roadway in front of the home. The homeowner and seven other individuals were in the home at the time of shooting. None of the occupants were injured.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The Tarboro Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the criminal investigation of this case. Assistant United States Attorney Peggah B. Wilson handled the prosecution of this case for the government.
Man Sentenced for Hobbs Act Robbery in FayettevilleRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr. announced that today in federal court, Chief United States District Judge James C. Dever, III sentenced ROGER TYRONE JACKSON, 46, of Sanford to 113 months of imprisonment followed by 3 years of supervised release. He also agreed to make restitution in the amount of $1,400.00.
JACKSON was named in a 2-count Indictment filed on August 14, 2017. On August 21, 2017, JACKSON subsequently pled guilty to one-count of Hobbs Act Robbery.
The evidence presented to the Court showed that JACKSON robbed the Food Lion grocery store on Bragg Boulevard in Fayetteville on August 14, 2016. Store video surveillance revealed JACKSON entered the store just prior to its closing and crawled on his hands and knees, often conducting combat rolls, to avoid being seen by store employees. JACKSON hid in the rear of the store until the store closed and the store’s customer service representative went into the office to count the till. He then slowly moved to the front of the store, walking and crawling, and crouched behind the customer service counter to wait for the customer service representative to return to place the till in the store’s safe. Upon the customer service representative’s return, JACKSON pointed a handgun at her and said, “Shush, put the money in a bag.” The handgun JACKSON used during the robbery was later determined to be a BB gun. The customer service representative backed away from the money, and JACKSON took that money, as well as money from the open safe. JACKSON fled the store on foot with $1,400.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The Fayetteville Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) conducted the criminal investigation of this case. Assistant United States Attorney James J. Kurosad handled the prosecution of this case for the government.
Man Sentenced to over 6 1/2 Years in Prison for Committing Two Armed Robberies One Week ApartRead the Press Release
LAS VEGAS, Nev. – A Las Vegas man was sentenced today to 67 months in prison and three years supervised release in connection with two armed robberies committed one week apart, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
Walid H. Abdulla, 65, pleaded guilty to one count of bank robbery and one count of interference with commerce by robbery. United States District Judge Howard D. McKibben presided over the sentencing hearing.
According to the plea agreement, Abdulla admitted that he committed two armed robberies in the Las Vegas Valley. On Jan. 30, 2017, he approached a clerk at a CVS Pharmacy at 8116 S. Las Vegas Blvd. with his gaming ticket from the pharmacy’s slot machine area and demanded the money from the cash register. He showed the clerk what appeared to be a semi-automatic handgun in his waistband and told the clerk to put the money inside a bag, stating, “you won’t get hurt if you just hurry.” Abdulla fled with $1,210 in cash. Abdulla further admitted that on February 6, he entered a Nevada State Bank at 3780 E. Flamingo and presented a robbery note demanding money from the vault. He showed the bank teller what appeared to be a semi-automatic handgun and fled with $5,000 in cash. Victims later identified Abdulla as the robber, he was observed by video surveillance at each robbery, and a forensic examination identified his fingerprint on the slot machine he used at the CVS.
The case was investigated by the FBI and the Las Vegas Metropolitan Police Department. The case was prosecuted by Assistant U.S. Attorney Kilby Macfadden.
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Man Pleads Guilty to Smuggling TigerRead the Press Release
Assistant U.S. Attorneys Melanie K. Pierson (619) 546-7976 or
Michelle Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – December 5, 2017
SAN DIEGO – Luis Valencia pleaded guilty in federal court today to smuggling a tiger cub into the United States from Mexico in the front passenger side of his car while driving through the San Ysidro Port of Entry on August 23, 2017.
In pleading guilty, Valencia admitted that on August 18, 2017, he contacted an individual in Mexico to make arrangements to obtain the tiger cub and bring it into the United States. The following day he received a photograph of a tiger cub from the individual in Mexico with a piece of paper in the photograph, upon which was written the defendant’s full name and the date of August 20, 2017.
On August 22, 2017, Valencia said he received a message from the individual in Mexico indicating that the tiger cub would be arriving at the Aeromexico cargo area of the Tijuana airport that evening. On August 23, 2017, at approximately 1:30 am, Valencia admitted that he entered the United States from Mexico driving a 2017 Camaro with no license plates. At the time of entry, as the defendant was aware, underneath the legs of his front seat passenger in the Camaro was a six-week old Bengal tiger cub. Valencia acknowledged that neither he nor his passenger declared the tiger cub as merchandise entering from Mexico upon their entry into the United States, although he was aware that it should have been declared. The defendant admitted that he intended to conceal the presence of the tiger cub and deceive the inspectors in order to bring the tiger cub into the United States, and further acknowledged that he brought the tiger cub into the United States for a commercial purpose.
All tiger species (Panthera tigris), including Bengal tigers (Panthera tigris tigris) are listed as endangered under the Endangered Species Act, and are listed on Appendix I of the Convention on International Trade in Endangered Species, an international agreement to which both the United States and Mexico are signatories. Valencia admitted that neither he nor any of his co-conspirators had received permission from the U.S. Fish and Wildlife Service to import a tiger cub into the United States from Mexico.
Valencia is scheduled to be sentenced before U.S. District Judge Anthony J. Battaglia on February February 20, 2018, at 9:00 am. Co-defendant Eriberto Paniagua is set for trial on January 9, 2018, at 9:00 a.m.
“We have laws in place to protect endangered species, and smuggling a tiger in the front seat of a car puts both the tiger and the public in jeopardy,” said U.S. Attorney Adam Braverman. “We will hold violators accountable.”
“Today’s guilty plea demonstrates Homeland Security Investigations’ (HSI) commitment to hold those involved in wildlife trafficking accountable,” said David Shaw, Special Agent in Charge of HSI in San Diego. “HSI Special Agents are committed to working together with U.S. Fish & Wildlife and other law enforcement partners to investigate and arrest those who do not abide by their legal obligations to seek permission from U.S. authorities to import endangered species such as the tiger cub in this case, who was ultimately rescued from this trafficking ring.”
“One of the highest priorities of the U.S. Fish and Wildlife Service Office of Law Enforcement is to investigate individuals involved in the unlawful commercial trafficking and smuggling of protected animals here and around the world,” said Fish and Wildlife Special Agent in Charge Jill Birchell. “Tigers are one of the most imperiled species on the planet, and this investigation demonstrates that anyone attempting to unlawfully exploit these majestic creatures will be apprehended and held accountable."
DEFENDANT Criminal Case No. 17cr2856-AJB
Luis Valencia Age: 18 Perris, California
SUMMARY OF CHARGES
Conspiracy, 18 U.S.C. § 371
Maximum penalty: 5 years’ prison, fine of $250,000 or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the offense, five years of supervised release.
AGENCIES
U.S. Fish and Wildlife Service, Office of Criminal Investigations
Homeland Security Investigations
Lugoff Man Pleads Guilty to Defrauding N.Y. Retirement SystemRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Joseph F. Grossmann, age 68, of Lugoff, South Carolina, pled guilty to Bank Larceny, a violation of Title 18, United States Code, § 2113(b), and was sentenced to probation for three years, including one year of home confinement. Grossmann was also ordered to pay $130,624 in restitution to the New York State Employees’ Retirement System. Magistrate Judge Paige J. Gossett presided at the hearing.
Evidence presented during the change of plea established that between 2010 and 2015, Grossmann collected retirement benefits for his sister, a former New York state employee, even though she had died. In total, he received approximately $130,624 over five years, none of which he was entitled to.
The case was originally prosecuted by the United States Attorney’s Office in the Southern District of New York. The case was transferred to South Carolina to accommodate the defendant’s health and living circumstances. Assistant United States Attorney Winston David Holliday, Jr., of the Columbia office handled today’s guilty plea and sentencing.
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Kyle Man Indicted for Aggravated Sexual Abuse ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kyle, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Minor and Abusive Sexual Contact.
Frankie Standing Bear, age 31, was indicted on November 22, 2017. Standing Bear appeared before U.S. Magistrate Judge Daneta Wollmann on November 29, 2017, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is life imprisonment and/or a $250,000 fine, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Standing Bear engaging in a sexual act with a child who had not attained the age of 12 between March 1, 2016, and September 15, 2017, at Kyle.
The charges are merely accusations and Standing Bear is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Standing Bear was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for February 6, 2018.
Kinston Man Sentenced for Federal Robbery ChargesRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr. announced that today in federal court, Chief United States District Judge James C. Dever, III sentenced KEENAN GERRON DRAKE, 25, of Kinston, NC to 54 months of imprisonment followed by 3 years of supervised release.
DRAKE was named in a 14-count Indictment filed on February 28, 2017. On May 22, 2017, DRAKE subsequently pled guilty to two-counts of Interference with Commerce by Robbery and Aiding and Abetting.
Between August 24, 2015, and May 15, 2016, a series of armed robberies occurred in the Eastern District of North Carolina and elsewhere. A total of seven robberies were conducted by various participants including DRAKE. He robbed the Family Dollar in Faison, NC and the U.S. Cellular in Kenansville, NC. On December 19, 2015, Arnold (previously sentenced) drove Nobles (awaiting sentencing) and Drake to the robbery site. While the cashier was turned away, one of the men placed a pistol on the counter and demanded the money. The cashier gave Nobles and DRAKE the money from the cash register and was instructed to face the wall. The cashier was then told if she turned around, she would be shot. Nobles and DRAKE fled the store with $62.84.
On December 20, 2015, after being driven by Arnold, Nobles and DRAKE entered the U.S. Cellular store. After some conversation, one of the defendants walked to the door and locked it. The clerk accessed the safe and handed Nobles or DRAKE the bank bags and was then instructed to tell them how to open the cash drawer. The clerk complied, and Nobles or DRAKE took the money out of the cash drawer, while the other assailant instructed the clerk to lie down. The store suffered a loss of $1,825.86.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The Lenoir County Sheriff’s Office, the Kenansville Police Department, the Duplin County Sheriff’s Office, the Snow Hill Police Department, the Kinston Police Department, the New Bern Police Department, and the Bureau of Alcohol Tobacco Firearms and Explosives (ATF) conducted the criminal investigation of this case. Assistant United States Attorney S. Katherine Burnette handled the prosecution of this case for the government.
Justice Department and ATF Begin Regulatory Process to Determine Whether Bump Stocks Are ProhibitedRead the Press Release
The Department of Justice and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced today that it has begun the process of promulgating a federal regulation interpreting the definition of “machinegun” under federal law to clarify whether certain bump stock devices fall within that definition.
"The Department of Justice has the duty to enforce our laws, protect our rights, and keep the American people safe," Attorney General Sessions said. "Possessing firearm parts that are used exclusively in converting a weapon into a machine gun is illegal, except for certain limited circumstances. Today we begin the process of determining whether or not bump stocks are covered by this prohibition. We will go through the regulatory process that is required by law and we will be attentive to input from the public. This Department is serious about firearms offenses, as shown by the dramatic increase in firearms prosecutions this year. The regulatory clarification we begin today will help us to continue to protect the American people by carrying out the laws duly enacted by our representatives in Congress."
ATF has taken the initial step in this regulatory process by drafting an Advanced Notice of Proposed Rulemaking (ANPRM) and submitting it to the Office of Management and Budget. The ANPRM will provide the public and industry the opportunity to submit formal comments to ATF about bump stocks to inform ATF’s decision regarding further steps in the rulemaking process. The federal rulemaking process follows procedures required by the Administrative Procedure Act (APA). ATF and the Department will proceed in accordance with this process as quickly as possible.
The National Firearms Act of 1934 (NFA) and Gun Control Act of 1968 (GCA) strictly regulate the possession and transfer of machineguns, making it unlawful for any person to possess a machinegun that was not lawfully possessed prior to the statute’s effective date. Manufacturers and inventors may voluntarily submit devices to ATF for a “classification,” that is, a determination as to whether the device is considered a firearm or machinegun under federal law. If a device is not classified as a firearm or machinegun, it is deemed to be a part or accessory that is not subject to regulation by ATF.
Jose Inez Garcia-Zarate to Face Federal Firearm Charges in the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Jose Inez Garcia-Zarate today for being a felon in possession of a firearm and ammunition, and for being an illegally present alien in possession of a firearm and ammunition, announced United States Attorney General Jefferson B. Sessions; United States Attorney Brian J. Stretch from the Northern District of California; and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder.
According to the indictment, on July 1, 2015, Garcia-Zarate, a citizen of Mexico who reportedly is 47 years old, possessed a semi-automatic pistol and multiple rounds of ammunition in violation of 18 U.S.C. § 922(g)(1) (felon in possession of a firearm) and 18 U.S.C. § 922(g)(5) (unlawfully present alien in possession of a firearm).
An indictment merely alleges that a crime has been committed and Garcia-Zarate, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. Garcia-Zarate currently is in state custody on other charges. If convicted of either violation of 18 U.S.C. § 922(g), Garcia-Zarate faces a maximum statutory penalty of 10 years in prison. However, any sentence will 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.
Assistant United States Attorneys Hallie Hoffman and Shiao Lee are prosecuting this case. This case is the result of an investigation by the ATF.
Jose Inez Garcia-Zarate to Face Federal Firearm Charges in the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Jose Inez Garcia-Zarate today for being a felon in possession of a firearm and ammunition, and for being an illegally present alien in possession of a firearm and ammunition, announced United States Attorney General Jefferson B. Sessions; United States Attorney Brian J. Stretch from the Northern District of California; and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder.
According to the indictment, on July 1, 2015, Garcia-Zarate, a citizen of Mexico who reportedly is 47 years old, possessed a semi-automatic pistol and multiple rounds of ammunition in violation of 18 U.S.C. § 922(g)(1) (felon in possession of a firearm) and 18 U.S.C. § 922(g)(5) (unlawfully present alien in possession of a firearm).
An indictment merely alleges that a crime has been committed and Garcia-Zarate, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. Garcia-Zarate currently is in state custody on other charges. If convicted of either violation of 18 U.S.C. § 922(g), Garcia-Zarate faces a maximum statutory penalty of 10 years in prison. However, any sentence will 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.
Assistant United States Attorneys Hallie Hoffman and Shiao Lee are prosecuting this case. This case is the result of an investigation by the ATF.
Jacksonville Resident Indicted for Alleged Preparation of False Federal Tax ReturnsRead the Press Release
SPRINGFIELD, Ill. – A grand jury today indicted a Jacksonville, Ill., man for allegedly aiding and assisting in the preparation of false income tax returns. The indictment alleges that West Mpetshi (ma-pet-shē), 36, of the 500 block of Beecher Ave., added false deductions and credits to income tax returns he prepared in 2015 and 2016.
The U.S. Clerk of the Court will issue a summons to Mpetshi to appear in federal court in Springfield for arraignment.
The case is being prosecuted by Assistant U.S. Attorney Gregory K. Harris, and was investigated by the IRS, Criminal Investigation.
If convicted, each of the four counts charged carries a maximum statutory penalty of up to three years in prison and a fine of up to $100,000.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Indictment Charges Springfield Man with Conspiracy to Distribute Heroin and Possession with Intent to DistributeRead the Press Release
SPRINGFIELD, Ill. - A grand jury today returned an indictment that charges Jeremy Outland, of Springfield, Ill., with conspiracy to distribute more than 100 grams of heroin in the Springfield area from November 2016 to November 2017. In addition, Outland is charged with possession of heroin with intent to distribute.
Outland, 39, of the 800 block of S. Martin Luther King Drive, was previously arrested and charged by federal criminal complaint on Dec. 1. According to the affidavit filed in support of the complaint, Outland allegedly made regular trips to Chicago to pick up heroin which he then sold in the Springfield area.
U.S. Magistrate Judge Tom Schanzle-Haskins ordered that Outland remain detained in the custody of the U.S. Marshals Service.
The DEA; Springfield Police Department, Pro-Active Crimes Unit; Illinois State Police; and, the Decatur Police Department conducted the investigation. Assistant U.S. Attorney Matthew Z. Weir is prosecuting the case.
If convicted, the statutory penalty for conspiracy to distribute more than 100 grams of heroin is five years to 40 years in prison; for possession with intent to distribute heroin the penalty is up to 20 years in prison.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Holland Couple Sentenced in Connection with Fraudulent Receipt of over $1,000,000 in Veterans Benefits and Postal Workers CompensationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Richard Klaffka, 59, and his wife, Cathleen Klaffka, 62, both of Holland, NY, who were convicted in connection with Richard Klaffka’s receipt of over $1,000,000 in benefits from the Department of Veterans Affairs (VA) and the Department of Labor under false pretenses, were sentenced by U.S. District Judge Richard J. Arcara. Richard Klaffka was convicted of wire fraud and sentenced to 32 months in prison. Cathleen Klaffka was convicted of misprision of a felony and sentenced to three years probation. The couple was also ordered to pay restitution totaling $1,237,427; $922,137 to the VA and $315,290 to the Department of Labor.
Assistant U.S. Attorney Paul E. Bonanno, who handled the case, stated that in 2006, Richard Klaffka told the VA that, due to an injury connected with his military service in 1978, he was disabled, confined to a wheelchair and unable to engage in daily activities like walking, driving, and dressing himself. To promote the fraud, Cathleen Klaffka pushed Richard Klaffka in a wheelchair when at the VA hospital in order to support Richard’s false claim regarding his mobility limitations. In fact, both knew that Richard Klaffka was able to walk without assistance and regularly engaged in extensive physical activities including hiking, riding a bike, and pitching iron horseshoes.
Similarly, in order to get workers compensation benefits from his employment with the United States Postal Service, the defendant falsely claimed that his mobility was limited due to a work injury and that he was only able to walk with the assistance of a cane. All told, the Klaffka’s received $1,237,427 in government benefits to which they were not entitled. The investigation was triggered by an anonymous call to a fraud hotline."Services and programs offered by federal agencies such as the VA and the Department of Labor are designed to assist those who are most in need,” said U.S. Attorney Kennedy. “When defendants like the Klaffka’s try to game the system, they victimize those who are truly deserving and in need. With today's prison sentence, Mr. Klaffka will finally be able to experience firsthand what it means to suffer a true limitation to one's mobility.”
“The Department of Veterans Affairs pays disability compensation to eligible veterans who suffer from an injury or disease stemming from their military service,” said VA OIG Special Agent-in-Charge Donna Neves. “The defendants in this $1.2 million scheme defrauded, not only their fellow veterans, but the American taxpayer.”
“Klaffka lied regarding the extent of his injury and physical limitations in order to fraudulently receive government benefits that he was not entitled to. The U.S. Department of Labor, Office of Inspector General will continue to work with our law enforcement partners to ensure the integrity of the Federal Workers Compensation Program and pursue criminal charges against those who seek to fraudulently benefit from the Federal Employee Compensation Act," said Michael C. Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Region.
U.S. Postal Service Office of Inspector General Acting Special Agent-in-Charge Kenneth M. Cleevely stated: “The U.S. Postal Service spends nearly $3 billion per year in workers compensation costs, most of which goes to deserving postal employees with legitimate injuries suffered on the job. However, a few of them choose to take advantage of the system and defraud the government of hundreds of thousands of dollars. Special agents with the U.S. Postal Service Office of Inspector General will diligently investigate and bring to justice with our law enforcement partners individuals who cheat the system, and take money they don’t deserve. This sentence should also serve as a deterrent to other postal employees who may be thinking of committing workers compensation fraud; you may end up behind bars and out of a job. To report crimes committed by postal employees, including workers compensation fraud, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
The sentencings are the result of an investigation on the part of Special Agents of the United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, under the direction of Donna L. Neves; the Department of Veterans Affairs Police Department, under the direction of Chief Jeremy Novak; U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Michael C. Mikulka, Special Agent-in-Charge of the New York Region; and the United States Postal Service, Office of Inspector General, under the direction of Kenneth M. Cleevely, Acting Special Agent-in-Charge, Eastern Area Field Office.
Greenville Man Sentenced for Federal Firearm & Obstruction of Justice ChargesRead the Press Release
GREENVILLE – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr. announced that today in federal court, Senior United States District Judge Malcolm J. Howard sentenced RICKY JAY BALL, 40, of Greenville to 96 months of imprisonment followed by 3 years of supervised release.
BALL was named in a 4-count Superseding Indictment filed on August 8, 2017. On September 11, 2017, BALL subsequently pled guilty to one-count of Possession of a Firearm and Ammunition by a Felon, two-counts of Obstruction of Justice, and one-count of Altering a Military Discharge Certificate.
On November 12, 2015, BALL received a two-year probationary sentence in the Eastern District of Virginia, following his misdemeanor convictions for Violation of Defense Property Security
Regulations and Possession of False Identification for his conduct in impersonating a United States Navy SEAL. On August 5, 2016, BALL’S supervision was transferred to the Eastern District of North Carolina. The Federal Bureau of Investigation (FBI) initiated an investigation in May 2015, upon receiving information from the Greenville Police Department (GPD) that BALL claimed to work for the North Carolina State Bureau of Investigation (NCSBI). Specifically, BALL told an intern with the Greenville Fire Department (GFD) that he was in court often due to his job, and he obtained warrants on individuals for committing crimes as part of his job responsibilities. BALL also told the intern he could get her parking tickets dismissed; however, the intern became suspicious when she received a late notice in the mail for unpaid parking tickets.
As early as November 17, 2015, BALL’S name appeared in police reports with the GPD as a loss prevention officer (LPO) for Sears in Greenville. During that time, BALL established a working relationship with members of the GPD and Pitt County Sheriff’s Office (PCSO), and BALL had asked several police officers if they wanted to shoot firearms with him on the firing range. Specifically, a detective with the PCSO observed BALL in possession of a pistol on April 28, 2016, while BALL was employed at Sears. The detective documented his observations after discovering BALL was a convicted felon. A subsequent interview with BALL’S store manager at Sears also revealed the store manager observed BALL in possession of a badge and firearm during BALL’S employment at Sears. Consequently, on May 28, 2016, the GPD arrested BALL for Impersonating a Law Enforcement Officer.
During a search of BALL’S residence, the PCSO seized a 9mm pistol, four pistol magazines, and numerous rounds of ammunition from BALL’S bedroom closet. Law enforcement later learned the
firearm was purchased by a man in Asheville, North Carolina. On June 30, 2016, the seller was interviewed by investigators and stated he sold the firearm to an individual who identified himself as Ricky Bennett, an alias of BALL. He stated he exchanged firearms with BALL (a/k/a Bennett), trading the recovered Springfield 9mm handgun with magazines for a Sig 9mm elite handgun. He noted BALL showed him his military identification, and BALL asserted to have trained with the U.S. Navy SEALS. On June 6, 2016, the GPD arrested BALL for Possession of a Firearm by a Felon at his residence in Greenville.
On May 17, 2017, a Probation Violation Hearing was held in the United States Magistrate Court in New Bern, North Carolina to revoke BALL’s federal probation based on his conduct of possessing a firearm as a felon and impersonating law enforcement. During that hearing, BALL submitted numerous false and fabricated documents to the Court. Those documents included fraudulent letters from his employer, community-services providers, and medical providers. Additionally, BALL altered a Military Discharge Certificate, DD-214, and changed his separation from the United States Marine Corps from “involuntary” to “medical.”
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The Federal Bureau of Investigation, Greenville Police Department, Pitt County Sheriff’s Office and the Naval Criminal Investigative Service conducted the criminal investigation of this case. Assistant United States Attorney Peggah B. Wilson handled the prosecution of this case for the government.
Four Sentenced in Fort Campbell Army Equipment ConspiracyRead the Press Release
Four of the seven defendants charged in a conspiracy to steal and sell U.S. Army equipment were sentenced today in U.S. District Court, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
John Roberts, 27, of Clarksville, Tenn., was sentenced today by visiting U.S. District Judge Hugh Lawson, from the Middle District of Georgia, to serve 15 years in prison. Roberts was found guilty by a federal jury on August 31, 2017, of conspiracy to steal U.S. Army property and selling that stolen property, 10 counts of wire fraud, and two counts of violating the Arms Export Control Act. Judge Lawson also ordered Roberts to pay $4.2 million in restitution to the U.S. Army.
During the trial, the evidence proved that Roberts conspired with U.S. Army soldiers who stole U.S. Army equipment, often after hours, from the U.S. Army installation at Fort Campbell. Roberts then purchased the equipment from the soldiers, in cash only deals and often in dark parking lots. Roberts then resold this military grade equipment via eBay. Roberts knew that some of the soldiers that he was purchasing the stolen equipment from had financial problems or serious drug addictions.
The U.S. Army equipment listed for sale on eBay included sniper telescopes and other sniper rifle accessories; parts for the M249 machine gun (including barrel assemblies, trigger groups, rail adapter kits, magazine buttstocks, mounts, and heat shields); sights for the M203 grenade launcher; “red dot” sights for the M2 and M4 assault rifles; flight helmets; communications headsets; and medical supplies. Certain equipment sold on eBay was advertised as “Army Special Forces,” “USGI” (U.S. Government Issued), and “New in Package.”
The evidence at trial also proved that Roberts illegally exported certain restricted U.S. Army equipment, including night vision helmet mounts. Roberts sold U.S. Army equipment to eBay customers around the world, including customers in Russia, China, Thailand, Japan, the Netherlands, Australia, India, Germany, and Mexico.
Three other defendants previously pleaded guilty and were also sentenced today, including:
- Alexander Hollibaugh, formerly of Fort Campbell, Kentucky, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was sentenced to time served and placed on probation;
- U.S. Army Specialist Dustin Nelson, 23 of Northville, New York, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was sentenced to three years’ probation; and
- Aaron Warner, of Fort Campbell, Kentucky, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was also placed on three years’ probation.
The four remaining defendants have also pleaded guilty and are scheduled to be sentenced on January 8, 2018. They are Michael Barlow and Jonathan Wolford, both of Clarksville, Tenn., Kyle Heade, of Fort Campbell, Kentucky and Cory Wilson, of Gonzalez, Louisiana. Each faces up to five years in prison and a fine of up to $250,000 on the conspiracy charge. Wilson faces up to 20 years for each count of wire fraud and violating the Arms Export Control Act. In addition, Barlow faces up to 10 years in prison on the theft charge. The defendants also face forfeiture of the proceeds of their crimes.
This case was investigated by the Department of Homeland Security and U.S. Army Criminal Investigation Command. Assistant United States Attorneys Thomas J. Jaworski and Courtney L. Coker prosecuted the case.
Former Procurement Officer at Federally Funded Nuclear Research and Development Facility Pleads Guilty to Wire Fraud and Money LaunderingRead the Press Release
A former procurement officer employed at Sandia Corporation, the prime operator of a federally funded nuclear research and development facility, pleaded guilty today to charges of wire fraud and money laundering for orchestrating a scheme to obtain approximately $2.3 million in federal funds through fraudulent means and for laundering fraudulently obtained proceeds through her father’s companies.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division made the announcement.
Carla Sena, 55, of Santa Rosa, New Mexico, pleaded guilty to one count of wire fraud and one count of money laundering before U.S. District Chief Judge M. Christina Armijo in the District of New Mexico. Sentencing will be scheduled at a later date before Judge Armijo.
According to the plea documents, Sena’s employer, Sandia Corporation, managed and operated Sandia National Laboratories (SNL), a nuclear research and development facility owned by the federal government under sponsorship of the U.S. Department of Energy (DOE). In late 2010, Sena managed the bidding process for the award of a multi-million-dollar contract for moving services at SNL. Sena admitted that, in anticipation of the bidding process for this contract, she created the company, New Mexico Express Movers LLC (Movers LLC), to which she awarded the multi-million-dollar contract. Sena prepared a bid on Movers LLC’s behalf containing fraudulent misrepresentations, and submitted the bid under the name of an individual who had no knowledge of Movers LLC to conceal her involvement. Sena also admitted that she used her position of trust to access inside information and competing bidders’ documents that she leveraged to ensure award of the contract to Movers LLC.
As a direct result of Sena’s fraudulent scheme, Movers LLC received approximately $2.3 million in federal funds between May 2011 and April 2016. Sena also admitted that, between October 2011 and April 2015, she transferred via negotiated checks at least $643,000 of the fraudulently obtained proceeds to legitimate businesses owned by her father with the intent to conceal the source and control of those funds and her subsequent personal gain from the proceeds.
The DOE Office of Inspector General investigated the case. Trial Attorneys Victor R. Salgado and Rebecca Moses of the Criminal Division’s Public Integrity Section are prosecuting the case.
Former Mobile Man Sentenced to Life in Prison for Child Sex CrimesRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announced that Myron Gerald “Ty” Stevens, 43, formerly of Mobile and Thomasville, Alabama, was sentenced to life in prison for sexual exploitation of children. The sentence was imposed by United States District Judge William H. Steele. In the event Stevens is ever released, he would be supervised by the United States Probation Office for the rest of his life, and required to register as a sex offender in any jurisdiction in which he lives, works, or is a student.
Stevens pled guilty in April, 2017 to two counts of production of child pornography; transporting a minor across state lines with the intent to engage in criminal sexual activity; receipt and distribution of child pornography; and possession of child pornography.
According to court records of Stevens’s plea, the investigation began in March of 2014, when law enforcement agents downloaded images of child pornography from a computer connected to the internet. Agents traced the location of the computer to a residence in Thomasville, and obtained a search warrant in August of 2014. Computer equipment and media storage devices were seized pursuant to the warrant, and an on-scene review of the data revealed a video of Stevens performing oral sex on a boy. Investigators learned that Stevens was on the way back from a trip to Florida with the boy. Agents immediately obtained an arrest warrant for Stevens, and he was arrested in transit from Florida.
In a videotaped statement, Stevens admitted to agents that he had sexually abused the 14-year old boy between 25 and 50 times over the previous two years, beginning when the boy was 12. Stevens also confessed that he had recorded some of the abuse and that he was addicted to child pornography that he downloaded and distributed on the internet. Stevens told investigators that the last time he had abused the boy was the previous night in Florida. The victim identified himself in sanitized photos and confirmed Stevens’s abuse of him for the past two years. He also identified a second boy in other videos Stevens took of the boy in Stevens’s apartment. Forensic analysis of the media recovered in the search revealed at least 1,877 images and 597 videos depicting child pornography.
The investigation was conducted by the Alabama Law Enforcement Agency with the assistance of the Thomasville Police Department and the Department of Homeland Security, Homeland Security Investigations. The case was prosecuted by Assistant United States Attorneys Sean P. Costello and Maria E. Murphy.
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 and for information about internet safety education, visit www.usdoj.gov/psc.
Former Frederick Business Owner Charged in $50 Million Bank FraudRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – A federal grand jury has charged Mark Ian Gaver, age 56, of Bonita Springs, Florida, with eight counts of bank fraud and two counts of money laundering arising from an alleged scheme to obtain $50 million in bank financing for his company using false and fraudulent financial statements, balance sheets, and certifications of outstanding accounts receivables. The indictment was returned today, although Gaver was previously arrested on a criminal complaint when he entered the United States from Canada on November 15th.
The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation (FBI), Baltimore Field Office; and Special Agent in Charge Steven Perez, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Northeast Region.
According to the ten-count indictment, in 1998 Gaver formed Gaver Technologies, Inc. (GTI,) an information technology company based in Frederick, Maryland. Between November 2008 and April 2016, Gaver allegedly submitted materially false financial documents to Santander Bank (Santander), including fraudulent audit reports and contract status reports, in order to obtain successive extensions and increases in lines of credit from Santander for GTI. Based upon the false documentation allegedly submitted by Gaver, Santander ultimately extended $50 million in financing to GTI. The indictment further charges that Gaver diverted a large portion of these fraudulently obtained funds to his own personal use.
According to the indictment, Santander initially approved an $18.5 million line of credit for GTI in August 2009. This line of credit was subsequently increased eight separate times between March 2010 and March 2016, successively growing from $18.5 million to a final total of $50 million. In connection with each request by Gaver for an increase in GTI’s credit line, Santander required GTI to submit specific documentation disclosing its financial performance and condition. The required documentation included audited annual financial statements, quarterly balance sheets, monthly borrowing base certificates, and monthly accounts receivable aging reports. The monthly borrowing base certificates required Gaver to certify the amount of GTI's outstanding accounts receivable, and were used by Santander to establish a maximum borrowing amount for GTI. Under the terms of GTI's line of credit agreement with Santander, GTI was only allowed to borrow up to 75% - 80% of the total amount of GTI's outstanding accounts receivable, and the funds loaned by Santander were only to be used for business purposes by GTI.
According to the indictment, Gaver also submitted Quarter Contract Status Reports to Santander between August 2009 and December 2016 which falsely represented that GTI had secured contracts with federal government agencies such as the Bureau of Alcohol, Tobacco and Firearms (ATF), the Environmental Protection Agency (EPA), the United States Air Force (USAF), the National Aeronautics and Space Administration (NASA), and the Department of Labor (DOL), or that overstated the amount of GTI’s ongoing contracts with various federal government agencies.
Gaver did use funds loaned by Santander to GTI for legitimate business purposes, but he also diverted substantial amounts of the loan proceeds to his own personal use. For example, Gaver used loan proceeds to pay $779,000 for the rental of private planes that he used for non-business purposes, as well as to pay for personal pleasure trips to St. Maarten, France, Germany, Mexico, Jamaica, and the Bahamas, as well as to purchase vacation homes, including a home in Bonita Springs, Florida that cost $2.275 million. Gaver also used loan proceeds to purchase a 2012 Maserati Gran Turismo; a 2011 Mercedes Benz SL Class Roadster; and a private membership at an exclusive golf club located in Naples, Florida that cost $300,000.
Gaver faces a maximum possible sentence of up to 30 years in prison for each of the eight bank fraud counts, as well as 10 years in prison on each of the two money laundering charges, and post-incarceration terms of supervised release for five years and three years respectively. Gaver had his initial appearance at U.S. District Court in Baltimore at 12:30 p.m. today, and a hearing to determine whether he will be released pending trial is scheduled for 2:00 p.m. on Wednesday, December 6th.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Stephen M. Schenning commended the FBI and the FHFA-OIG for their work on the investigation. Mr. Schenning also thanked Assistant U.S. Attorneys Rachel M. Yasser and Jefferson M. Gray, who are prosecuting the case.
Former Felon Sentenced to 10 Years in Prison for Illegal Possession of FirearmsRead the Press Release
LAS VEGAS, Nev. – A former felon who was convicted for federal firearms violations was sentenced today to 120 months in prison, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
Tajh Dion Weatherspoon, 28, was found guilty in May of one count of felon in possession of a firearm and he pleaded guilty to a second count of felon in possession of a firearm. Weatherspoon had two prior felony convictions, including attempted burglary and felon in possession of a firearm. In addition to the term of imprisonment, United States District Judge Howard D. McKibben imposed a three year term of supervised release.
According to the superseding indictment, Weatherspoon was in possession of a Glock 19 handgun on June 15, 2016, and a Glock 21 handgun on Dec. 22, 2016. The Court severed the two counts and ordered that the trials proceed one after the other, beginning May 15, 2017. After the jury convicted Weatherspoon of possessing the Glock 19 handgun, he declined to proceed to trial on the count charging possession of the Glock 21 handgun and instead pleaded guilty without the benefit of a plea agreement.
The case was investigated by the FBI, ATF, the Las Vegas Metropolitan Police Department, and the North Las Vegas Police Department. The case was prosecuted by Assistant U.S. Attorneys Tony Lopez and Patrick Burns.
This case was brought as part of Project Safe Neighborhoods, a nationwide commitment by the Department of Justice to reduce gun and gang crime in America by networking local programs that target gun and gun crime and providing these programs with additional tools necessary to be successful. For more information about Project Safe Neighborhoods, visit www.justice.gov/usao-nv.
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Former Broadview Heights man sentenced to nearly six years in prison for defrauding Cuyahoga Heights School District out of $2.6 millionRead the Press Release
A former Broadview Heights man was sentenced to nearly six years in prison for his role in a scheme to defraud the Cuyahoga Heights School District out of millions of dollars, law enforcement officials said.
David Donadeo, 43, (formerly known as Donald A. Rupp) was sentenced to 70 months in federal prison and ordered to pay approximately $2.6 million in restitution.
Donadeo and others established and owned shell vendor companies that were used to defraud the school district. Joseph Palazzo worked as Cuyahoga Heights School District’s information technology director. Palazzo was responsible for managing the District’s IT Department, which included purchasing hardware and software and making other IT expenditures to benefit the District and its students, according to court documents.
Palazzo, Donadeo, and others devised a scheme to divert millions of dollars of school district funds to their own personal use. Overall, the school district sustained a loss of approximately $3.3 million.
This scheme involved Palazzo submitting to the school distict false invoices that purported to be for IT-related goods and services purchased from legitimate companies by the school district’s IT department. Palazzo represented that the invoices he submitted were legitimate, and he approved the false invoices himself or forged the signature of another in the approval section, according to court documents.
The companies named on the invoices did not supply such goods to or perform such services for the District and were nothing more than shell companies set up by Donadeo and others to perpetrate the fraud scheme. The invoices listed services that were never performed, fictitious software and hardware, adn software and hardware never received or already purchased by the school district from another source, according to court documents.
Relying on these invoices, the school district issued checks to these shell vendor corporations, two of which Donadeo operated. Donadeo, and the other shell vendor corporation owner kept approximately half of the stolen money themselves and funneled the remainder of the money back to Palazzo for his personal use, according to court documents.
According to court documents, Donadeo fled the country with his family shortly after learning authorities were were pursuing a criminal investigation and had executed search warrants. The case was indicted in 2013, but Donadeo remained at large until May 2017, when Spain extradited Donadeo and returned him to the U.S. to face prosecution.
“This defendant set up sham corporations that he used to steal millions of dollars from the students and taxpayers of Cuyahoga Heights,” said U.S. Attorney Justin E. Herdman.
“David Donadeo will be in prison for more than five years for his involvement in a scheme laced with a web of financial lies, but the harm caused to the students and citizens of Cuyahoga Heights may last a lifetime,” said Ryan L. Korner, Special Agent in Charged, IRS Criminal Investigation, Cincinnati Field Office.
“David Donadeo stole from the citizens and students of Cuyahoga Heights and then avoided the consequences of his actions for years,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office. “The investigators are to be commended for uncovering this enormous fraud.”
Joseph Palazzo was sentenced to 11 years in prison for his role in the conspiracy. His brother, Dominic Palazzo, was sentenced to 30 months in prison. Dennis Boyles was sentenced to more than two years in prison for his role in the conspiracy.
This case was investigated by the Internal Revenue Service -- Criminal Investigation and the Federal Bureau of Investigation, with the assistance of the State of Ohio Auditor’s Office, the Cuyahoga County Sheriff’s Office and the United States Postal Inspection Service.
The case was prosecuted by Assistant United States Attorney Rebecca Lutzko and Assistant United States Attorney James L. Morford.
Former Attorney Sentenced for Mail FraudRead the Press Release
HAMMOND –United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Robert E. Stochel, age 64, of Crown Point, Indiana was sentenced before District Court Senior Judge James T. Moody for mail fraud.
Stochel was sentenced to 24 months imprisonment and ordered to pay restitution in the amount of $229,091.97.
According to documents filed in this case, Stochel, a local attorney, and former Tip Top Supermarket receiver was convicted on a charge of mail fraud relating to a scheme he operated from 2001 to June 2012 against the Tip Top Receivership estate. In his capacity as receiver, Stochel stole hundreds of thousands of dollars from the receivership and then attempted to hide that theft from not only the court that appointed him receiver but also from the receivership’s beneficiaries. Stochel was convicted after a 3-day jury trial in May of 2017.
“Attorneys are entrusted with a great deal of power and authority to act on behalf of and in the best interests of their clients,” said US Attorney Kirsch. “Those who do not, but instead engage in criminal conduct, will be prosecuted to the fullest extent of the law.”
This case was the result of an investigation by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorneys Diane Berkowitz, Alexandra McTague and Maria Lerner.
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Five Defendants Arrested in Bottle-Return BustRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Leon Hayward, Acting Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced that ELDAR RAKHAMIMOV, NASIM RAKHAMIMOV, VLADIMIR ZABRODIN, RUSLAN KADIROV, and JOSEPH FINNERAN were taken into federal custody today for participating in a scheme to defraud beverage bottling companies and the State of New York. The defendants were presented this afternoon before U.S. Magistrate Judge James L. Cott.
According to the allegations in the Complaint filed today in Manhattan federal court:[1]
From September 2016 to December 4, 2017, ELDAR RAKHAMIMOV, NASIM RAKHAMIMOV, ZABRODIN, KADIROV, and FINNERAN conspired to defraud bottling companies and the State of New York through a scheme involving recyclable containers.
The defendants’ scheme exploited recycling incentives created by New York State’s Returnable Container Act (the “RCA”). The RCA created a $.05 deposit on bottled soft drinks, beer, and water sold in New York State to promote the recycling of bottles and cans by bottlers, beverage distributors, and container redemption centers. Under the RCA, the first bottler, distributor, or dealer to collect the required deposits on beverage containers is required to reimburse the $.05 deposit to redeeming individuals or entities and to pay a handling fee of $.035 per empty beverage container redeemed by redemption centers.
ELDAR RAKHAMIMOV and NASIM RAKHAMIMOV managed a bottle collection company (“Company-1”) that focused on aggregating recyclable containers and delivering them, in exchange for payment, to redemption centers in the New York City area. ELDAR RAKHAMIMOV and NASIM RAKHAMIMOV, along with ZABRODIN, KADIROV, and FINNERAN, worked together to falsely inflate the number of bottles delivered by Company-1 to induce redemption centers to overpay bottle deposits and handling fees to Company-1.
Using an assortment of deceptive techniques, ranging from doctored invoices to “redeeming” the same bottles twice to impermissibly collecting bottles from New Jersey to paying (or receiving) kickbacks, the defendants extracted hundreds of thousands of dollars from victim companies – and, ultimately, the State of New York.
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ELDAR RAKHAMIMOV, 46, of Brooklyn, New York, NASIM RAKHAMIMOV, 46, of Brooklyn, New York, ZABRODIN, 32, of Staten Island, New York, KADIROV, 32, of Brooklyn, New York, and FINNERAN, 64, of Bay Shore, New York, are each charged with one count of conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Kim praised the outstanding work of the FBI, the CBP, and the NYPD for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Andrew C. Adams, Frank J. Balsamello, and Andrew Thomas are in charge of the case.
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.
Fayetteville Man Sentenced for Possession of a Firearm by a FelonRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr. announced that today in federal court, Chief United States District Judge James C. Dever, III sentenced DASHAWN JEWELIN MCCALL, 24, of Sanford to 57 months of imprisonment followed by 3 years of supervised release.
MCCALL was named in a 1-count Indictment filed on March 28, 2017. On August 21, 2017, MCCALL subsequently pled guilty to one-count of Felon in Possession of a Firearm.
On December 13, 2016, officers from the Fayetteville Police Department were conducting surveillance on a vehicle belonging to MCCALL due to outstanding warrants for MCCALLS’s arrest. Officers observed MCCALL exit a nearby store with his girlfriend and enter the vehicle. Officers approached the vehicle and placed MCCALL under arrest. A .40 caliber handgun, loaded with fourteen rounds of ammunition, was found tucked into MCCALL’S waistband underneath his shirt. MCCALL admitted to possessing the firearm. Based on the investigation, MCCALL possessed a firearm on December 13, 2016, subsequent to sustaining a conviction for Assault with a Deadly Weapon on a Government Official, a felony that is classified by the federal sentencing guidelines as a “crime of violence.” MCCALL provided a written acceptance of responsibility statement to the United States Probation Office acknowledging the conduct outlined in the Indictment.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The Fayetteville Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) conducted the criminal investigation of this case. Assistant United States Attorney James J. Kurosad handled the prosecution of this case for the government.
Eagle Butte Woman Sentenced for Possession of MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, woman charged with Possession of a Controlled Substance pled guilty and was sentenced on November 27, 2017, by U.S. Magistrate Judge Mark A. Moreno.
Shawnda Cyrene Dupris, age 31, was sentenced to 18 months of probation, a fine of $1,000 and a special assessment to the Federal Crime Victims fund in the amount of $25.
On September 16, 2016, law enforcement executed a search warrant on the Eagle Butte apartment leased by Shawnda Dupris, and in which Dupris and Wacey James Long resided. During the execution of the search warrant, law enforcement found and seized a Savage Arms, Springfield model 67H, 12 gauge shotgun, bearing no serial number, and drug paraphernalia testing positive for methamphetamine. Dupris admitted to possessing methamphetamine on that date, but denied owning the firearm or knowing it was in her apartment.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services Narcotics Division and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case
Dupris was released on conditions following sentencing. Wacey James Long was convicted and sentenced on August 21, 2017, to 25 months in custody for the firearms violation.
Drug Trafficker Sentenced in Brooklyn Federal Court to 10 ½ Years’ Imprisonment for Distributing FentanylRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Edward Carrillo, also known as “Super Ed,” was sentenced by United States District Judge Brian M. Cogan to 10 ½ years’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release. The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015. The judge also ordered forfeiture in the amount of $150,000.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“The defendant peddled fentanyl from New York City to West Virginia with callous disregard for the human consequences of this dangerous drug,” stated Acting United States Attorney Rohde. “Carrillo’s sentence should serve as a message that fentanyl dealers who promote and profit from this deadly epidemic will be held accountable for their crimes.”
“What started as a local investigation targeting a crack cocaine distribution organization turned into a murder mystery upon the death of a young pregnant mother in West Virginia,” DEA Special Agent in Charge James Hunt stated. “Fentanyl doesn’t discriminate against users, nor do drug dealers whose only concern is profit. Law Enforcement will continue to identify dealers and traffickers responsible for fueling opioid abuse and the rising number of fentanyl-related overdoses.”
According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50. Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA. The recent rise in overdose deaths has been driven in large part by fentanyl—a drug that has been described as 50 to 100 times more potent than morphine. Opioids have been a particular problem in West Virginia where the defendant and his co-conspirators trafficked substantial amounts of fentanyl. One of those deaths was a young mother, whom Carrillo and his co-conspirators believed they killed with their fentanyl pills. Upon learning of the young mother’s death, Carrillo’s co-conspirator was intercepted over a judicially authorized wiretap stating, “the girl went out.” When Carrillo asked what the co-conspirator meant by “went out,” the co-conspirator left no ambiguity that a young woman had died: “Went out! OD, OD,” with ‘OD’ referring to a drug overdose.
According to the government’s sentencing memorandum, in addition to his involvement in the fentanyl conspiracy, the defendant supplied a significant amount of the cocaine that was converted to crack and sold in the Queensbridge community. He also agreed to commit an armed robbery of an individual believed to be traveling with $110,000. When Carrillo was arrested in December 2016, law enforcement officers recovered a loaded gun at his apartment, which he used as a grow house for marihuana.
On November 16, 2017, co-defendant Terrell Carmichael was sentenced to 51 months’ imprisonment for conspiring to distribute crack-cocaine. The other defendants are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution.
The Defendants:
LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West VirginiaTERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New YorkEDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New YorkDARRYL KNOWLES
Age: 29
Bronx, New YorkJOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New YorkKYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New YorkMICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New YorkE.D.N.Y. Docket No. 16-CR-617 (BMC)
Dominican National Pleads Guilty to Illegal ReentryRead the Press Release
BOSTON – Felipe Rodolfo Baez-Romero, 46, pleaded guilty today in federal court in Boston to one count of illegal reentry of a deported alien. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Feb. 8, 2018.
On Sept, 29, 2017, law enforcement in Boston encountered Baez-Romero and determined that he was unlawfully present in the United States. Baez-Romero was previously deported on May 7, 2013.
The charge provides for a sentence of no greater than two years in prison, one year of supervised released and a fine of up to $250,000. Baez-Romero will face deportation proceedings upon completion of his sentence. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Weinreb’s Major Crimes Unit is prosecuting the case.
Columbus, Ohio man indicted on failure to update sex offender registryRead the Press Release
WHEELING, WEST VIRGINIA – Christopher D. Barker, of Columbus, Ohio, was indicted by a federal grand jury in Wheeling on a failure to update a sex offender registration charge, United States Attorney Bill Powell announced.
Barker, also known as Christopher D. Cooper, age 29, was indicted on one count of “Failure to Update Registration as a Sex Offender - SORNA.” Barker, having previously been convicted as a sex offender, is accused changing addresses without updating his sex offender registration. The crime is alleged to have occurred from August to October 2017 in Ohio County, West Virginia and elsewhere.
Barker faces up to ten years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen L. Vogrin is prosecuting the case on behalf of the government. The United States Marshal Service is investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Clearfield Man Sentenced for Possession of MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Clearfield, South Dakota, man charged with Possession of a Controlled Substance pled guilty and was sentenced on November 27, 2017, by U.S. Magistrate Judge Mark A. Moreno.
Cory Scott Fischer, age 45, was sentenced to 10 months in custody, followed by 1 year of supervised release, a fine of $1,000 and a special assessment to the Federal Crime Victims fund in the amount of $25.
During the late night hours of November 10, 2016, and into the early morning hours of November 11, 2016, Rosebud Sioux Tribe Law Enforcement Officers responded to a call involving the defendant at the Rosebud Casino. Inside Fischer’s vehicle, officers found a baggie containing methamphetamine belonging to Fischer that weighed 18.92 grams. Fischer admitted that the methamphetamine, a Schedule II controlled substance, was his.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Fischer was ordered to self-surrender to the custody of the U.S. Marshal’s Service or the U.S. Bureau of Prisons on January 2, 2018, to serve his sentence.
Cheswick Man Sentenced to Prison for Possessing Child PornographyRead the Press Release
PITTSBURGH - A former resident of Allegheny County, Pennsylvania, has been sentenced in federal court to 57 months imprisonment, followed by five years supervised release, on a charge of possession of material depicting the sexual exploitation of a minor, Acting United States Attorney Soo C. Song announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentenced yesterday on Michael Allen Sanders, age 56, of Cheswick, Pennsylvania.
According to information presented to the court, on June 25, 2015, Sanders knowingly possessed and knowingly accessed with intent to view images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
Acting U.S. Attorney Soo C. Song commended the Federal Bureau of Investigation and the Allegheny County District Attorney’s Office for conducting the investigation leading to the successful prosecution of Sanders.
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.
Brawley Man Sentenced for Stealing More Than $250,000 from Local FarmRead the Press Release
Assistant U.S. Attorney Christine M. Ro (619)546-7937
NEWS RELEASE SUMMARY – December 4, 2017
SAN DIEGO - Former bookkeeper Claude Theodore Riley was sentenced in federal court today to 24 months in prison for embezzling from his former employer and failing to pay taxes on the stolen funds. He was also ordered to pay $273,000 in restitution to the employer and $75,000 to the Internal Revenue Service.
Riley pleaded guilty in September to wire fraud and making a false tax return in a five-year scheme in which he stole stealing from his employer, an Imperial Valley farm. Riley stole approximately $272,984.00 from his employer, filed fraudulent tax returns, and failed to file required employment tax returns resulting in a $1.5-million-dollar tax lien against the farm.
Riley served as the farm’s bookkeeper from 2010 to 2015, overseeing the farm’s entire annual budget. As the bookkeeper, Riley had access to the farm’s bank accounts, paychecks, and bookkeeping records. Riley forged certain IRS documents to hide his embezzlement from the employer. For his scheme, Riley made 148 transactions out of the employer’s bank account, fictitiously entered various vendors to be paid into the bookkeeping records, and generated checks made payable to himself.
“His employer trusted Riley to safeguard the fruits of their labor, but he diverted hundreds of thousands of those hard-earned dollars into his own pocket,” said U.S. Attorney Adam Braverman. “Today, the defendant pays the price for his deception.”
“Mr. Riley took advantage of the trust of his employer for his own benefit,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today, justice is served for this Imperial Valley farm family. This case is an excellent example to illustrate how the FBI works to uncover fraud schemes that have a significant impact on the Valley's hard-working farming industry.”
The farming industry is an important source of Imperial Valley’s economy and producer of agriculture for the nation. Imperial Valley is one of California’s top producers of agriculture, which generates income for local families in the Southern District of California.
DEFENDANT Criminal Case No. 17CR2721-BAS
Claude Theodore Riley Age: 56 Brawley, California
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fine
Filing a False Tax Return – Title 26, U.S.C., Section 7206(1)
Maximum penalty: 3 years’ imprisonment and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation, Imperial County Resident Agency
Internal Revenue Service, Criminal Investigation
Brawley Police Department