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25 January 2018
Mount Morris Man Sentenced on Methamphetamine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Buffalo, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Zackery D. Billings, 27, of Mount Morris, NY, who was convicted of conspiracy to manufacture, possess with intent to distribute, and to distribute, a mixture and substance containing methamphetamine, was sentenced to 36 months in prison by U.S. District Court Judge Lawrence J. Vilardo.Assistant U.S. Attorney Brendan T. Cullinane, who handled the case, stated that between January of 2011 and October 25, 2011, the defendant conspired to manufacture and distribute methamphetamine. In order to avoid restrictions on the purchase of pseudoephedrine, an important chemical in the methamphetamine manufacturing process, Billings engaged in the practice of “smurfing” (buying small quantities) at local pharmacies.
The sentencing is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Lieutenant Kevin Reyes and Major David Krause; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Region; the Southern Tier Regional Drug Task Force, under the direction of Cattaraugus County Sheriff Timothy Whitcomb; the Wellsville Police Department, under the direction of Chief Timothy O’Grady; U.S. Border Patrol, under the direction of Patrol Agent-in-Charge Steven Oldman; and the New York State Department of Environmental Conservation, under the direction of Captain John Burke.
Mission, Texas Man Sentenced to Federal Prison for Role in Drug Trafficking / Money Laundering ConspiracyRead the Press Release
In San Antonio yesterday afternoon, a federal judge sentenced 46–year-old Reymundo Villarreal-Arelis (aka “Mundo”) of Mission, TX, to 20 years imprisonment followed by five years of supervised release for his role in a drug trafficking and money laundering conspiracy occurring in South Texas, Central Texas and Oklahoma announced United States Attorney John F. Bash, Western District of Texas; United States Attorney Ryan K. Patrick, Southern District of Texas; Acting Internal Revenue Service-Criminal Investigation Special Agent in Charge Andy Tsui, San Antonio Division; and, Drug Enforcement Administration Special Agent in Charge Will Glaspy, Houston Division.
On June 15, 2017, jurors convicted Villarreal-Arelis on one count of conspiracy to possess with intent to distribute five kilograms or more of cocaine and one count of conspiracy to commit money laundering. Jurors found that Villarreal-Arelis and others, including 12 relatives, conspired to (1) engage in financial transactions using proceeds derived from the importation, receipt, concealment, purchase, and/or selling cocaine; and (2) transport or transmit monetary instruments to locations outside of the United States in an effort to conceal the source, ownership and control of proceeds derived from unlawful activity.
Evidence presented at trial revealed that the defendant was a member of a significant Rio Grande Valley cocaine trafficking family known as “Los Piojos” led by brothers Gilberto Villarreal-Arelis, Reymundo Villarreal-Arelis, and Juan Villarreal-Arelis (aka ”Juando”) along with their nephew, Jose Luis Villarreal-Gonzalez (aka “Nune”). Beginning in 2000, this organization was responsible for the importation and distribution of thousands of kilograms of cocaine supplied by the Gulf Cartel and subsequently by Los Zetas. This organization maintained control over smuggling routes stretching from Guatemala to Diaz Ordaz, Mexico, across from McAllen, TX. Cocaine was smuggled into and kept in stash houses in McAllen before being transported to San Antonio, Houston, Dallas, New York, Chicago, Atlanta, Oklahoma, North Carolina and Florida.
Testimony during trial revealed that cocaine sales generated millions of dollars for this organization, some of which was used to purchase more than 50 quarter horses. The defendants used the horse racing industry as one money laundering mechanism for their illegal proceeds.
During this investigation, authorities seized 280 kilograms of cocaine and between $15-20 million in assets attributed to the criminal activity of the defendants, including cash in various bank accounts, quarter horses, the Riverside Plaza shopping center in Mission, numerous residences and other real estate properties.
To date, 14 individuals and two companies have pleaded guilty to federal charges in connection with this investigation. Terms for 13 individuals previously sentenced range from probation to 216 months incarceration. Sergio Guadalupe Adame–Ochoa, Alan Land LP, and Alan Management LLC are scheduled to be sentenced on March 7, 2018. On March 19, 2018, three additional defendant companies--Edison Commerical, LP; Edison Investments, LLC; and Antequera Partners, LP—are scheduled for jury selection and trial on money laundering conspiracy charges. Defendant Gilberto Villarreal-Arelis (aka “Beto”, “Betito”) remains a fugitive.
This investigation was conducted by the IRS-Criminal Investigation Waco Treasury Task Force, which is comprised of the IRS-CI, the Irving Police Department, the Woodway Public Safety Department and the McLennan County Sheriff’s Office, together with the Drug Enforcement Administration’s McAllen, San Antonio and Houston field offices, the Homeland Security Investigations and the United States Marshals Service.
Mission Man Sentenced for Firearms ChargesRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man convicted of Possession of Unregistered Firearm and Prohibited Person in Possession of a Firearm was sentenced on January 22, 2018, by U.S. District Judge Roberto A. Lange.
Keith Bordeaux, age 20, was sentenced to 33 months in custody, followed by 3 years of supervised release, $546.34 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $200.
Bordeaux was indicted by a federal grand jury on March 15, 2017. He pled guilty on October 30, 2017.
The conviction stems from an incident between November 11-13, 2016, when 14 firearms were stolen from a home in Mission. Co-defendant Dakota Marshall stored two of the stolen firearms, including a Marlin Bolt Action .22 Rifle and a Weatherby 20 Gauge Youth shotgun TA-08, at his home located in Mission. Co-defendant Stephanie Bear Heels obtained the stolen Henry Repeating Arms Mimi Bolt .22 rifle following the burglary. She and co-defendant Angelito Moran knew that the defendant and his brother, co-defendant Kevin Bordeaux, were looking for guns to buy/trade for narcotics. Defendant purchased the “Broden” rifle from Moran and Bear Heels for $50 worth of methamphetamine. The “Broden” rifle was recovered by law enforcement from Keith and Kevin Bordeaux’s home.
The defendant acquired the stolen Weatherby “short shotgun” with a barrel length of approximately 14 and 5/8 inches, the same night law enforcement seized the stolen “Broden” rifle from his home. Defendant did not register the “short shotgun” with the National Firearms Registration and Transfer Record as he was required to do. Instead, he hid the firearm in the wall of a young child’s room in his mother’s home.
The defendant knew the firearms were stolen, and the possession of the firearms by any person other than the owner would be unlawful. Further, the defendant is a regular user of methamphetamine and he is not permitted to possess any firearm under federal law.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Bureau of Alcohol, Tobacco and Firearms. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Keith Bordeaux was immediately turned over to the custody of the U.S. Marshals Service.
Mexican Man Sentenced for Illegal Use of a Social Security NumberRead the Press Release
EFRAIN VARELA-TOLENTINO, age 31, a citizen of Mexico was sentenced today after previously pleading guilty to illegal use of a Social Security Number in violation of Title 42, United States Code, Section 408(a)(7)(B).
U.S. District Judge Jane Triche-Milazzo sentenced VARELA time served to be followed by one year of supervised release. VARELA will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, VARELA illegally used a Social Security number that was not assigned to him by the Social Security Administration to register for a safety training class that he was required to complete before he could begin working for his employer at various industrial sites as a pipe insulator.
U.S. Attorney Evans praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Metairie Man Sentenced to 72 Months After Pleading Guilty to Receipt of Child PornographyRead the Press Release
U.S. Attorney Duane A. Evans announced that BRIAN LISTER, age 41, of Metairie, Louisiana, was sentenced today to 72 months imprisonment by United States District Judge Jane Triche Milazzo after previously pleading guilty to a one-count Indictment charging him with receipt of images and videos depicting the sexual exploitation of children. LISTER was sentenced to pay $7,500 in restitution, and a mandatory special assessment fee of $100. LISTER was also ordered to register as a sex offender.
According to court documents, special agents with the Federal Bureau of Investigation executed a search warrant at LISTER’S residence on July 23, 2015, after obtaining information that LISTER had repeatedly accessed a website dedicated to the advertisement and distribution of child pornography. During the search, the FBI seized numerous electronic items including one laptop computer and one external digital storage device that contained images and videos of child pornography. A forensic examination of the device revealed that LISTER used the devices to search for, download, and save images and videos of children as young as approximately two (2) year old engaging in sexually explicit conduct. LISTER obtained most, if not all, of the images and videos via a via a peer-to-peer file sharing program. The forensic examination located approximately 1,148 images and 1 videos of prepubescent children engaging in sexually explicit on LISTER’S electronic devices.
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 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 www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Jordan Ginsberg.
Massachusetts Insurance Broker Sentenced to Prison for Filing False Tax ReturnsRead the Press Release
A Dover, Massachusetts, insurance broker was sentenced today to eight months in prison for filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Andrew E. Lelling for the District of Massachusetts.
According to the evidence presented at trial, Anthony J. May, 62, owned and operated Clients First Financial Insurance Agency LLC, through which May sold life insurance products as an insurance broker, and Advantage Life Settlements LLC, through which he served as a broker for insured individuals seeking to sell their personal life insurance policies to third party investors. May operated his businesses out of an office suite in Hingham, where he also leased office space to other independent insurance agents. May filed false 2006 through 2009 individual income tax returns that did not report more than $738,000 in income that he received from insurance commissions, brokerage fees, and office rental payments.
In addition to the term of imprisonment, U.S. District Court Judge William G. Young ordered May to serve one year of supervised release. May was previously convicted following a jury trial in May 2017 of filing false 2008 and 2009 tax returns.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Lelling praised special agents of the Internal Revenue Service Criminal Investigation, who conducted the investigation, and Trial Attorney Eric Powers of the Tax Division and Assistant U.S. Attorney Victor A. Wild, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Marshall County man sentenced for drug distribution chargeRead the Press Release
WHEELING, WEST VIRGINIA – Rhett D. Gump, of Moundsville, West Virginia, was sentenced to 12 months and one day incarceration for a drug distribution charge, United States Attorney Bill Powell announced.
Gump, age 24, pled guilty to one count of “Distribution of Methamphetamine in Proximity to a Protected Location” in September 2017. Gump admitted to selling methamphetamine near the Golden Towers in Moundsville on January 5, 2017.
Assistant U.S. Attorney Robert H. McWilliams, Jr., prosecuted the case on behalf of the government. The Marshall County Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.
Man Pleads Guilty to DOD Bribery and Kickback ConspiracyRead the Press Release
ALEXANDRIA, Va. – An Alabama man pleaded guilty today to his role in a bribery and kickback scheme involving a contract for the Department of Defense’s Office of Inspector General (DOD OIG).
According to court documents, Ronald A. Capallia, Jr., 37, accepted over $700,000 in kickbacks from William S. Wilson, of Florida, in exchange for unlawfully steering work to Wilson’s companies in connection with prime government contracts, and further assisted Wilson in providing bribes to former DOD OIG employee Matthew Kekoa LumHo, 42, of Fairfax Station. At the time of the kickbacks, Capallia worked for a telecommunications company that had been awarded a prime contract to provide an array of voice and data services to the DOD OIG and other federal agencies. In return for the kickbacks, Capallia repeatedly caused his employer to order services from Wilson’s companies, even though he knew that Wilson’s companies had no relevant expertise in providing the services to be performed, and despite knowing that there was no legitimate business reason to involve Wilson’s companies. Capallia also submitted millions of dollars in false service orders to the DOD OIG for services that he, Wilson, and LumHo knew would not be provided to the government. Capallia arranged to submit these false service orders so that Wilson could substantially inflate the prices his company was charging indirectly to the government, and to conceal the fact that several of the service orders were pretexts through which to pay bribes to LumHo. Wilson routed the kickbacks to Capallia in the form of over $500,000 in supposed salary payments to Capallia’s relative for a job that did not exist, through the purchase of two brand new vehicles each worth over $40,000, through over $60,000 in Caribbean cruises, airfare, and hotel accommodations, and through the purchase of electronics equipment.
Capallia pleaded guilty to conspiracy to commit wire fraud and to false claims. He faces a maximum penalty of 25 years in prison when sentenced on September 14. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Robert Craig, Special Agent in Charge for Defense Criminal Investigative Service Mid-Atlantic Field Office, made the announcement after U.S. District Judge Liam O’Grady accepted the plea. Assistant U.S. Attorneys Matthew Burke and Samantha Bateman are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-223.
Man Convicted in Tax Avoidance ConspiracyRead the Press Release
HOUSTON – A local bar owner has entered a guilty plea to conspiring with others to defraud the United States by failing to pay taxes on income he received from vending machines located in the bars he owned, announced U.S. Attorney Ryan K. Patrick.
In the plea agreement filed in the record of the case, Jerome E. Rivera admitted he had partial ownership of multiple bars in the Houston area that operated under the name “On the Rox.” Rivera conspired with others to conceal the cash income from vending machines located in the bars from the IRS.
According to the plea agreement, Rivera admitted he failed to report a total of $557,289 in income for tax years 2010, 2011 and 2012. Rivera’s failure to pay taxes on this income resulted in a tax loss to the United States of $147,375.
U.S. District Judge David Hittner accepted the plea and has set sentencing for April 19, 2018. At that time, Rivera faces up to five years in federal prison and a possible $250,000 maximum fine. Rivera was permitted to remain on bond pending that hearing.
IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
MS-13 Gang Member Sentenced to Federal PrisonRead the Press Release
Acting United States Attorney Corey R. Amundson announced that, yesterday, United States District Court Judge Shelly D. Dick sentenced JUAN BLANCO, age 37, a member of the notorious MS-13 gang, to serve 21 months in federal prison following his conviction for illegal re-entry into the United States by a removed alien.
In March of 2017, a federal grand jury sitting in the Middle District of Louisiana returned an indictment charging BLANCO with illegal re-entry into the United States. BLANCO had been arrested by local law enforcement authorities and was in custody, charged with using a machete to commit an assault in Baton Rouge. BLANCO was eventually convicted of aggravated assault and other offenses in state court and, in August of 2017, he pled guilty to the pending federal indictment. BLANCO admitted during yesterday’s sentencing hearing that he is a member of MS-13, a violent gang active in Central America and the United States. BLANCO’s criminal history dates back to 2002 and includes multiple convictions for robbery, assault, battery, and resisting an officer. BLANCO previously was deported from the United States to his home country of El Salvador in 2008.
Acting U.S. Attorney Amundson stated, “Immigration-related crimes involving those affiliated with gangs are a priority for this office, and for good reason: BLANCO illegally re-entered the United States after being deported, and once here, he continued committing violent crimes in our community. I appreciate the work of ICE-Enforcement and Removal Operations in identifying BLANCO and bringing him to our attention, so that we could use the resources and criminal statutes available to us to assist in keeping BLANCO off of our streets for as long as possible.”
“This case is a great example of how ICE Enforcement and Removal Operations is working to keep criminal illegal aliens out of our communities,” said Acting New Orleans Field Office Director Scott L. Sutterfield. “ERO will continue focusing our resources on ensuring violent threats to our citizens receive the justice they deserve.”
This matter was handled by the United States Attorney’s Office for the Middle District of Louisiana, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, and the East Baton Rouge Parish Sheriff’s Office. This case was prosecuted by Assistant United States Attorneys Ryan Rezaei and Kevin Sanchez.
Lynnfield Woman Charged with Filing False Tax ReturnsRead the Press Release
BOSTON – A Lynnfield woman was arrested today and charged with filing false tax returns, in which she claimed more than a $370,000 mortgage interest deduction, even though she had defaulted on the loan and the property had gone into foreclosure.
Karyn M. Ingram, 50, was charged in an indictment with three counts of filing false tax returns for tax years 2011, 2012 and 2013. Ingram had an initial appearance today in federal court in Boston.
According to the indictment, Ingram filed tax returns in which she reported false and inflated Schedule A deductions and in one year, a Schedule C business loss, in order to reduce her overall tax liability. For example, for tax years 2010 and 2011, Ingram filed returns claiming mortgage interest deductions of $45,072 and $371,427, but she had not made any mortgage payments since 2008, the loan had defaulted, and the property had gone into foreclosure. She also claimed real estate tax deductions in those same tax years, when, in reality, the real estate taxes had been paid by the mortgage lender and not by Ingram. The indictment alleges that by falsifying the deductions and losses, Ingram fraudulently reduced her tax liability by more than $126,000.
The charge of filing false tax returns provides for a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Economic Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Lower Brule Man Sentenced for Sexual AbuseRead the Press Release
United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, man convicted of Sexual Abuse of a Minor was sentenced on January 22, 2018, by U.S. District Judge Roberto A. Lange.
Errol Jerome Flute, a/k/a Errol Jerome Pretty Sounding Flute, a/k/a EJ Flute, age 24, was sentenced to 18 months in custody, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Flute was indicted by a federal grand jury on May 16, 2017. He pled guilty on November 2, 2017.
The conviction stems from an incident on December 29, 2016, when the 14-year-old victim went to her boyfriend’s home in Lower Brule. The defendant is engaged to the victim’s boyfriend’s mother. The victim’s boyfriend was sleeping on the couch, and the victim began to socialize with the defendant and others. The defendant’s fiancée left the residence, and the defendant and the victim ended up in the back bedroom where they engaged in sexual intercourse.
This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Flute was immediately turned over to the custody of the U.S. Marshals Service.
Lockport Woman Sentenced on Drug ChargesRead 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 Colette Arne, 67, of Lockport, NY, who was convicted of possession with intent to distribute, and distribution of oxymorphone, a Schedule II controlled substance, was sentenced to two years supervised release by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that between January 2012 and January 6, 2014, the defendant sold oxymorphone to a confidential source working with law enforcement officers on two separate occasions at the defendant’s Applewood Drive residence. Following the second sale, Arne’s residence was searched with her consent. Officers recovered $20,200 in cash and empty prescription pill bottles. The prescriptions were issued to the defendant and her now-deceased husband.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Local Medical Doctor Sentenced for Illegally Dispensing and Distributing Controlled Substances by Prescriptions and Money LaunderingRead the Press Release
U.S. Attorney Duane A. Evans announced that FREDERICK FLOYD, D.O., age 58, a physician who practiced and resided in New Orleans, was sentenced today after previously pleading guilty to a two-count Bill of Information charging him with illegally dispensing controlled substances and money laundering.
U.S. District Judge Carl J. Barbier sentenced FLOYD to ten years (120 months) imprisonment.
According to court documents, DR. FLOYD illegally dispensed and conspired with others to illegally dispense controlled substances, including Oxycodone, a Schedule II controlled substance, and other controlled substances. The original charge, contained in a complaint filed in court, states that DR. FLOYD dispensed more than 4.8 million dosages of controlled substances by prescriptions between January 1, 2015 and August 31, 2016. At least half of this quantity was distributed illegally by DR.FLOYD.
As part of the sentence imposed, FLOYD was ordered to forfeit over $42,000 in property seized, currency, and real property. Additionally, the Court imposed a forfeiture money judgment against FLOYD in the amount of $2,500,880.41.
“Let DR. FLOYD’s conviction and forfeiture money judgement serve as notice to anyone who chooses to illegally distribute prescription opioids that your criminal acts will not be tolerated. The Department of Justice, the Eastern District of Louisiana, and our federal, state, and local law enforcement partners are committed to battling the opioid epidemic. The investigation and prosecution of these types of cases remains one of the top priorities of this office,” stated U.S. Attorney Duane A. Evans
“Dr. Frederick Floyd took an oath to serve humanity as an educated medical professional and decided to violate that oath and his duty by choosing to peddle prescription drugs for one sole purpose – greed. His disgraceful conduct is part of the massive opioid epidemic faced by the entire nation and the greater New Orleans area today. More than 116 Americans are dying every day from an opioid overdose and the deaths are continuing to rise. Let this lengthy sentence be a message to all that DEA will continue to pursue, arrest, and prosecute drug traffickers of every type, including rouge medical professionals. We will continue to work with all of our law enforcement and community partners in an effort to combat this opioid epidemic and keep our communities safe,” stated DEA Special Agent in Charge Stephen G. Azzam.
U.S. Attorney Evans praised the work of the Special Agents of the Drug Enforcement Administration, Internal Revenue Service, New Orleans Police Department, Jefferson Parish Sheriff’s Office, Harahan Police Department, Westwego Police Department, New Orleans District Attorney’s Office, Kenner Police Department, and St. Bernard Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney John F. Murphy was in charge of the prosecution.
Leeds Resident Indicted for Scheme to Defraud the IRS; Charges Allege at Least 60 Fraudulent Tax Returns Were FiledRead the Press Release
SALT LAKE CITY -- A federal grand jury returned a 24-count indictment Wednesday afternoon charging Landon Blake Pilkey, age 33, of Leeds, Utah, with what the indictment alleges was a scheme to defraud the IRS. Money obtained through the alleged fraud scheme was transferred to other co-conspirators in Lebanon and the United Arab Emirates.
Announcing the indictment are Utah U.S. Attorney John W. Huber and Tara Sullivan, IRS-Criminal Investigation Special Agent in Charge of the Las Vegas IRS Field Office.
According to the indictment, the fraud scheme operated from about March 10, 2013, to May 28, 2013. Pilkey and other co-conspirators in the case used the names and personal identifying information of deceased individuals to file and fraudulently obtain federal tax returns. At least 60 fraudulent tax returns were filed as part of the scheme. The fraudulent tax returns resulted in deposits of $58,658, the indictment alleges.
Pilkey facilitated the receipt of money as a part of the scheme. According to the indictment, Pilkey maintained and monitored several bank accounts where fraudulent tax refunds were deposited. The indictment alleges Pilkey transferred money from the accounts to other co-conspirators of the scheme in Lebanon and the United Arab Emirates Pilkey made at least 15 withdrawals from the accounts where the fraudulent tax returns were deposited and wrote four checks to himself from the accounts for which he had no signing authority, the indictment alleges.
The first count of the indictment alleges conspiracy to submit false claims in connection with the attempt to defraud the IRS. The potential maximum penalty for this count is 10 years in prison.
Theft of public money is charged in 19 counts of the indictment reflecting money Pilkey received through the fraudulently filed federal tax returns. The potential maximum penalty for each count of theft of public money is 10 years in prison.
The final four counts of the indictment allege aggravated identity theft. These counts allege Pilkey possessed and used the identification of another person to commit a felony – in this case, theft of government money. Each identity theft count has a potential minimum-mandatory sentence of two years in prison. The sentence would be served consecutive to any other sentence imposed in the case.
Pilkey will be issued a summons to appearance in federal court.
An indictment is not a finding of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorney Richard W. Daynes is prosecuting the case. Special agents of IRS Criminal Investigation are investigating the case.
Las Vegas Resident Pleads Guilty to Filing False Tax ClaimsRead the Press Release
OAKLAND - Eric Oase pleaded guilty in federal court in Oakland today to filing false claims with the United States, announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf.
In pleading guilty, Oase, 52, of Las Vegas, Nev., admitted he owned and operated E&K Tax Solutions in San Leandro, Calif. Oase acknowledged he knowingly prepared and filed numerous false federal income tax returns for others with the Internal Revenue Service. Specifically in 2012, Oase prepared 2008, 2009, 2010, and 2011 federal income tax returns for his customers that reported false wages, false education expenses, or both, which generated tax refunds. Regardless of the amount of wages or expenses provided by the customers, Oase falsely reported income and education expenses for his customers that generated tax refunds. Oase electronically filed with the IRS the false 2011 tax returns. He directed his customers to mail their 2008 through 2010 tax returns to the IRS. In total, Oase directed his clients to claim fraudulent tax refunds in the amount of $477,333.
A federal grand jury indicted Oase on January 17, 2017, charging him with six counts of filing false claims, in violation of 18 U.S.C. § 287. Pursuant to today’s agreement, Oase pleaded guilty to two of the counts.
Oase is currently free on bond. His sentencing hearing is scheduled for May 24, 2018, before the Honorable Yvonne Gonzalez Rogers, U.S. District Judge, in Oakland. The maximum statutory penalty for each count of filing a false claim in violation of 18 U.S.C. § 287 is five years in prison and a fine of $250,000. 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 U.S. Attorney José A. Olivera is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Las Cruces Man Pleads Guilty to Federal Drug Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Guy Bell, 29, of Las Cruces, N.M., pled guilty today in federal court to drug trafficking and firearms charges.
Bell was arrested on Aug. 16, 2017, on an indictment charging him with distributing methamphetamine near a school, being a felon in possession of a firearm, and using and carrying a firearm in relation to a drug trafficking crime. According to the indictment, Bell committed the offenses on Nov. 2, 2016, in Dona Ana County, N.M. Bell was prohibited from possessing firearm or ammunition because he previously has been convicted of larceny of a firearm and tampering with evidence.
During today’s proceedings, Bell pled guilty to a felony information charging him with distribution of methamphetamine near a school, being a felon in possession of a firearm and using and carrying a firearm in relation to a drug trafficking crime. In entering the guilty plea, Bell admitted that on Nov. 2, 2016, he facilitated the sale of approximately 27 grams of pure methamphetamine between an undercover law enforcement agent and Bell’s source of supply, by driving the agent to the residence of the source of supply, which was approximately 500 feet away from an elementary school. Bell also admitted carrying a loaded pistol during the drug transaction for his protection. Bell acknowledged that he was prohibited from possessing firearms or ammunition because of his status as a convicted felon.
At sentencing, Bell faces a maximum penalty of 40 years of imprisonment on the drug trafficking charge and a maximum penalty of ten years of imprisonment for being a felon in possession of a firearm. In addition, Bell faces a mandatory penalty of at least five years of imprisonment for using a firearm in relation to a drug trafficking crime and this sentence must be served consecutive to the sentence imposed on the other charges. Bell remains in custody pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant U.S. Attorneys John Balla and Dustin Segovia of the U.S. Attorney’s Las Cruces Branch Office.
Lafayette man sentenced to 14 years in prison for receiving child pornography through FacebookRead the Press Release
LAFAYETTE, La. – United States Attorney Alexander C. Van Hook announced that a Lafayette man was sentenced last week to 168 months in prison for enticing a minor into sending images of child pornography online.
Steven Anthony Lemoine, 29, of Lafayette, was sentenced January 18 by U.S. District Judge Dee D. Drell on one count of receiving child pornography. He was also sentenced to 15 years of supervised release and must register as a sex offender. According to the October 19, 2018 guilty plea, Lemoine posed as a female on Facebook and enticed a 12-year-old minor to send him images of child pornography on December 26, 2016 and January 5, 2017. Lemoine’s home was later searched, and he admitted to using the online persona to obtain the images.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines 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.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
The U.S. Department of Homeland Security, Louisiana State Police and Marksville Police Department conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.
Lafayette man pleads guilty to sending obscene picturesRead the Press Release
LAFAYETTE, La. – United States Attorney Alexander C. Van Hook announced that a Lafayette man pleaded guilty Tuesday to sending obscene pictures to an undercover law enforcement agent posing as a 10-year-old boy.
Kory Issac Wilson, 39, of Lafayette, pleaded guilty before U.S. Magistrate Judge Patrick Hanna to one count of transportation of obscene material. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, Wilson began communicating with an undercover law enforcement agent on October 12, 2016. The agent posed as a father who wanted help sexually exploiting a 10-year-old boy. Wilson then began communicating with a second undercover agent who posed as the 10-year-old boy. Wilson sent the second agent three sexually explicit pictures of himself via text message.
Wilson faces up to five years in prison, three of supervised release and up to a $250,000 fine. The court set the sentencing date for May 18, 2018.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines 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.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
The U.S. Department of Homeland Security and Louisiana State Police conducted the investigation. Assistant U.S. Attorneys T. Forrest Phillips and John Luke Walker are prosecuting the case.
Laconia Man Pleads Guilty to Methamphetamine TraffickingRead the Press Release
CONCORD, N.H. - James Cunningham, 61, of Laconia, New Hampshire, pleaded guilty in federal court to four counts of distributing methamphetamine, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, Cunningham, a member of the Hells Angels Motorcycle Club, sold quantities of methamphetamine on four separate occasions in 2013 to an individual who was cooperating with the FBI. Three of the drug transactions took place in Manchester and one occurred in Merrimack.
Cunningham is scheduled to be sentenced on May 9, 2018.
“Drug trafficking crimes cause tremendous damage to our community,” said Acting U.S. Attorney Farley. “In addition to the terrible problems of overdoses and addiction, drug trafficking often is associated with violence and can jeopardize the safety of the citizens living in the Granite State. We continue to work each day with our law enforcement partners to identify and prosecute drug traffickers so that we can decrease violence and improve the quality of life in New Hampshire.”
"We're pleased to see Mr. Cunningham, a member of one of the most violent and notorious gangs in the United States, finally accepting responsibility for trafficking illegal narcotics," said Harold H. Shaw, Special Agent in Charge, Federal Bureau of Investigation (FBI), Boston Division. “The FBI New Hampshire Safe Streets Gang Task Force is fully committed to eradicating gang violence, and the flow of illegal drugs that comes with it. Together, with our law enforcement partners, we're going to take back our communities from violent offenders who are inhibiting the safety and growth of our neighborhoods."
This matter was investigated by the FBI New Hampshire Safe Streets Gang Task Force, which is comprised of the FBI, the New Hampshire State Police, New Hampshire Probation and Parole, and the Police Departments of Hudson, Manchester, and Nashua. Assistance was provided by the Laconia police department. The case is being prosecuted by Assistant U.S. Attorney Shane B. Kelbley.
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Laboratory and Owner of Lab Management Services Company to Pay $3.77 Million to Resolve Kickback and Medical Necessity ClaimsRead the Press Release
DALLAS - Primex Clinical Laboratories, LLC has agreed to pay $3,500,000 to resolve allegations that it violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for patient pharmacogenetic testing. In a related settlement, Mitch Edland, the Chief Executive Officer and owner of DNA Stat, LLC, has agreed to pay $270,000 to resolve similar allegations. Both settlements were announced today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Primex Clinical Laboratories, LLC (Primex), is a licensed clinical laboratory providing clinical diagnostic testing services, including pharmacogenetic testing. DNA Stat, LLC (DNA Stat) was a laboratory management company that employed sales representatives and licensed pharmacists. Primex and DNA Stat entered into a services agreement related to pharmacogenetic testing services.
The settlement resolves allegations brought by two whistleblowers that Primex submitted claims to Medicare that were rendered false as a result of Primex and DNA Stat providing kickbacks from June 2013 through March 2016. The relators alleged several kickback schemes, including a scheme where the defendants created the appearance of paying physicians to provide clinical study data for a Primex-sponsored study related to pharmacogenetic testing when, in fact, the physicians were being paid for referring patients for the testing. The relators also alleged a scheme where the defendants provided physicians with in-office medical technicians to do work related to the Primex-sponsored study in an effort to induce those physicians to order pharmacogenetic tests from Primex. Finally, the relators alleged that the pharmacogenetic tests were not medically necessary. The United States also contends that DNA Stat’s agreement with Primex as well as its agreements with its sales representatives took into account the volume and value of referrals physicians made to Primex for pharmacogenetic tests when calculating compensation.
The settlement with Primex resolves the allegations centered on providing in-office medical technicians to physicians; entering into improper sales and services agreements; and submitting claims for pharmacogenetic tests that were not medically necessary. Mr. Edland’s settlement resolves all allegations against him contained in the lawsuit. Neither party admitted any wrongdoing or liability.
The qui tam, or whistleblower, lawsuit was brought by relators Don Pyburn and David Choate, former sales representatives for DNA Stat. The qui tam or whistleblower provisions of the FCA authorize private parties to sue for fraud on behalf of the United States and share in the recovery. The relators will receive $754,000.
The investigation was conducted by Health and Human Services Office of Inspector General and the FBI. The case was handled by Assistant U.S. Attorneys Dawn Whalen Theiss and Lindsey Beran.
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Kanawha County felon sentenced to over five years in federal prison for gun and drug crimesRead the Press Release
CHARLESTON, W.Va. – A Kanawha County felon who possessed guns and drugs was sentenced today to five years and three months in federal prison, announced United States Attorney Mike Stuart. Eddie Wayne Chapman, Jr., 32, of Malden, previously pleaded guilty to being a felon in possession of a firearm and possession with intent to distribute methamphetamine. U.S. Attorney Stuart commended the Kanawha County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation.
Chapman admitted that on September 21, 2016, he possessed a Ruger P89, 9mm semi-automatic pistol and a Maverick by Mossberg, Model 88, 12 gauge shotgun that had a modified barrel less than 18 inches in length. Chapman was prohibited from possessing any firearms under federal law because of a 2011 felony drug conviction in Kanawha County Circuit Court. Chapman further admitted to possessing with the intent to distribute over 20 grams of methamphetamine. Law enforcement found the methamphetamine in Chapman’s backpack, concealed in a canister containing a hidden compartment.
Assistant United States Attorney Timothy D. Boggess handled the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
This case was brought as part of Project Safe Neighborhoods, a nationwide commitment to reduce gun crime in the United States by networking with existing local programs targeting gun crime. This case was also prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Justice Department Files Statement of Interest in California College Free Speech CaseRead the Press Release
The Department of Justice today filed a Statement of Interest in Young America’s Foundation and Berkeley College Republicans v. Janet Napolitano. The plaintiffs, Berkeley College Republicans (BCR) and Young America’s Foundation (YAF), allege that the University of California, Berkeley, enforced a double standard when applied to free speech. BCR alleges that UC Berkeley applied a more rigorous and highly discretionary set of rules to their organization compared to other campus groups, especially with respect to “high-profile” campus speakers.
The plaintiffs filed the lawsuit as a result of excessive hurdles BCR faced in bringing speakers of their choice onto campus. They allege that UC Berkeley’s High Profile Speaker Policy and Major Events Policy violated their rights under the First and Fourteenth Amendments.
In their lawsuit, the plaintiffs allege that Berkeley’s “High-Profile Speaker Policy” granted administrators unfettered discretion to decide which speakers are subject to arduous curfews, prohibitive security costs, or undesirable venues. In one instance, administrators—who had full discretion to determine who constituted a “high-profile speaker”—established a 3:00 pm “curfew” that conflicted with class times.
While the plaintiffs attempted to book speakers under the restrictions of the “High-Profile Speaker Policy,” a former president of Mexico and a former White House adviser were hosted at the University, but University administrators did not apply the High-Profile Speakers Policy to those events.
In filing the Statement of Interest, Associate Attorney General Rachel Brand provided the following statement:
“This Department of Justice will not stand by idly while public universities violate students’ constitutional rights.”
In addition to the statement, Associate Attorney General today penned an op-ed on the issue of campus free speech.
This is the third Statement of Interest filed by the Department of Justice in a First Amendment case under Attorney General Jeff Sessions. The first was filed on September 26, 2017 in Uzuegbunam v. Preczewski, and the second was filed on October 24, 2017 in Shaw v. Burke.
Attorney General Sessions reestablished the Department’s commitment to protecting First Amendment rights—especially campus free speech-- in a speech at Georgetown Law School in 2017.
Jury Convicts Final Two in Katy Bank RobberyRead the Press Release
HOUSTON – The final two people involved in the July 2017 armed robbery of First Community Credit Union in Katy have been convicted, announced U.S. Attorney Ryan K. Patrick. The jury deliberated for approximately two hours following a four-day trial before convicting Walter Freeman Jordan aka “Wacko,” 30, and Johnathon Nico Wise, 26, both of Houston.
Both were charged and convicted of aiding and abetting aggravated bank robbery. Jordan was also convicted of aiding and abetting the unlawful use of a firearm in the commission of a crime of violence.
Five others - Jaylen Christine Loring, 21, Daryl Carlton Anderson, 32, Deandre Bendard Santee, 26, Raymond Demond Pace, 20, and Zelmer Samuel Bonner, 26, pleaded guilty prior to trial.
The jury heard that at approximately 12:52 p.m. on July 25, 2017, a stolen black Toyota Tundra drove to the front of the First Community Credit Union located at 23120 Cinco Ranch Boulevard in Katy. Once there, Jordan, Bonner and Pace entered the bank and ordered everyone to get on the ground. While inside, Jordan and Bonner jumped the teller counter and demanded credit union employees to open the teller drawers. When one of those employees did not comply quickly enough, Bonner punched the employee in the head while yelling “hurry up!”
Pace kept customers and employees on the ground during the robbery. Soon thereafter, he yelled “the cops are down the street, let’s go!”
The robbers were communicating with the lookouts - Wise, Santee, Anderson and Loring - outside of the credit union via cell phone during the crime.
The robbers returned to the Toyota Tundra and fled the scene along with three other vehicles – a silver Chevrolet Malibu, silver Nissan Rogue and a maroon Volkswagen Jetta. Loring was apprehended a short time later in the Malibu as was Anderson who was driving the Jetta. Shortly thereafter, officers also stopped the Rogue and arrested Santee and Wise.
Authorities pursued the Tundra for 19 miles, which was travelling at speeds up to 120 mph east on I-10. Authorities were eventually able to apprehend Pace, Bonner and Jordan at the North Post Oaks Lofts apartment complex in Houston. Officers located a Springfield semi-automatic pistol from the Toyota Tundra as well as a Stoeger Cougar .40 Caliber semi-automatic pistol from inside the apartment where Jordan had been hiding.
During trial, the jury heard from Loring and Anderson who testified about the robbery plan and what transpired. Additional testimony came from more than 10 officers as well as an expert who explained how the cell phones were identified and used during the crime.
The defense attempted to convince the jury that Jordan and Wise had been mis-identified and had no knowledge of the robbery plan. They did not believe their claims and found them guilty as charged.
They are set for sentencing April 12, 2018.
All of the defendants face up to 25 years for the bank robbery charge. Bonner, Pace and Jordan also face an additional seven years for the firearms conviction which must be served consecutively to any other prison term imposed. With the exception of Loring, who was permitted to remain on bond, all have been and will remain in custody pending their respective sentencing hearings.
The case is the result of the Houston Law Enforcement Violent Crime Initiative created to proactively fight violent crime across the Greater Houston area. The FBI and the Houston Police Department conducted the investigation. Assistant U.S. Attorneys Richard D. Hanes and Heather Rae Winter are prosecuting the case.
Junior Feliz Sentenced in Connection with Armed Robbery of McDonald’s Restaurant in Lockhart Shopping CenterRead the Press Release
St. Thomas, USVI – Junior Feliz, 22, of the Dominican Republic, was sentenced today for his role in the armed robbery of the McDonald’s restaurant in Lockhart Shopping Center, United States Attorney Gretchen C.F. Shappert announced.
District Court Judge Curtis V. Gomez sentenced Feliz to 36 months in prison for conspiracy to commit Hobbs Act robbery. Judge Gomez also sentenced Feliz to three years of supervised release, ordered him to pay a $100 special assessment, and perform 300 hours of community service.
On June 6, 2017, Feliz pleaded guilty to conspiracy to commit Hobbs Act robbery. According to documents filed in court, on March 25, 2017, members of the Virgin Islands Police Department (VIPD) responded to reports of a robbery at the McDonald’s restaurant in Lockhart Shopping Center. After an exchange of gunfire, the armed individuals inside the McDonald’s restaurant surrendered to law enforcement and were taken into custody. Feliz was arrested after the investigation revealed that he was the driver of the getaway vehicle and was involved in the planning, execution, and attempted cover-up of the robbery.
The case was investigated by the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco and Firearms, and VIPD. The case was prosecuted by Assistant U.S. Attorney Sigrid M. Tejo-Sprotte and former Criminal Chief Christian A. Fisanick.
Ivan Reyes ChargedRead the Press Release
HAMMOND - The United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Ivan Reyes, age 30, of Calumet City, Illinois was charged by Complaint with the Murders of Lauren Calvillo and Christopher White.
According to documents in this case, Reyes was charged in a criminal complaint with two counts of murder resulting from the use and carrying of a firearm during and in relation to a drug trafficking crime. According to the criminal complaint, on June 29, 2015, Ivan Reyes as a member of the Latin Counts was involved in the shooting deaths in Hammond, Indiana, of Lauren Calvillo and Christopher White. The criminal complaint further alleges that the shooting was in furtherance of a conspiracy to distribute marijuana and cocaine by members of the Latin Counts street gang and as a result of an ongoing gang conflict between the Latin Counts and Latin Kings street gangs in Hammond, Indiana.
United States Attorney Thomas L. Kirsch II said, “The murders of Lauren Calvillo and Christopher White were heinous acts of senseless gang violence. Due to a relentless investigation conducted with our law enforcement partners, I am pleased that we are able to bring charges in this case at this time. Our investigation is ongoing and will not end until all responsible for these terrible acts are brought to justice.”
The United States Attorney's Office emphasized that a Complaint is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is being investigated by the ATF/HIDTA Task Force and the Hammond, Indiana Police Department, and the investigation has received substantial assistance from numerous law enforcement agencies including the FBI / GRIT Task Force, the Gary Police Department, the Indiana State Police, and the East Chicago Police Department. The case is being handled by Assistant U.S. Attorneys David J. Nozick, Thomas R. Mahoney, and Dean R. Lanter.
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Investment Fund Manager Sentenced in Brooklyn Federal Court to 36 Months’ Imprisonment for Orchestrating Multi-Million Dollar Fraud SchemesRead the Press Release
Earlier today, in federal court in Brooklyn, Diane W. Lamm, a manager of Capital L Financial Group, LLC (Capital L) and Aegis Capital Fund, LLC (Aegis Capital Fund), was sentenced to 36 months’ imprisonment having pled guilty to two counts of securities fraud for defrauding investors out of millions of dollars in two separate schemes. Lamm pled guilty to the charges on February 5, 2016. The Court also ordered Lamm to pay restitution to the victims in the amount $15,640,582.46. The sentencing took place before United States District Judge Frederic Block.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“To support their luxurious lifestyles, Lamm and her co-defendant stole millions of dollars from investors and their retirement accounts,” stated United States Attorney Donoghue. “Today’s sentence sends a powerful message of deterrence to others who would consider deceiving investors. This Office, together with our partners at the FBI, is committed to holding financial fraudsters accountable for their conduct.”
“Investment advisers are required to act in the best interest of their clients. Lamm did just the opposite by taking advantage of those who trusted her with their money, benefitting personally from illegitimately obtained profits,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI has dedicated a significant amount of resources to uncovering financial crimes targeted against individuals, businesses, and industries. Today’s sentencing serves as a fine example of our continued success in this area.”Between 2009 and 2013, Lamm was involved in two schemes to steal investors’ money. In the first, she and her co-defendant, John R. Lakian, obtained more than $11 million by promising Capital L investors that their money would be used to purchase, consolidate, and sell registered investment advisory businesses. Instead, Lamm and her co-defendant diverted more than $3 million to themselves and to entities, including hospitality businesses that they owned and controlled. In the second scheme, Lamm and her co-defendant embezzled money through their management of Aegis Capital Fund, a North Carolina-based investment fund that was placed into liquidation in 2011. Prior to the liquidation, Lamm and her co-defendant directed more than $2.4 million of Fund assets into hospitality businesses without informing the Fund’s investors that Lamm and her co-defendant owned and controlled these businesses. More than $1.9 million of the $2.4 million of Fund assets was never recovered by the investors. Additionally, following the Fund’s liquidation, instead of returning investment proceeds to investors, Lamm and her co-defendant diverted more than $2 million of investors’ money to themselves and to their hospitality businesses. The government has identified credit card charges and company expenses for purposes unrelated to the purchase, consolidation and sale of registered investment advisers. Charges were incurred, for example, for clothing, furniture and fine art from luxury stores such as Bergdorf Goodman, Gucci and Paul Stewart; stays at the Palace and Waldorf Astoria hotels in New York City; getaways at luxury resorts; and items for Lamm and her co-defendant’s restaurant business.
Lamm’s co-defendant, John R. Lakian, pleaded guilty in February 2016 to two counts of securities fraud. He was sentenced, on December 15, 2017, to 55 months’ imprisonment and ordered to pay restitution to the victims in the amount $15,640,582.46.The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman G.S. Knapp is in charge of the prosecution. Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is responsible for the forfeiture of assets.
The Defendant:DIANNE W. LAMM
Age: 57
New York, New York
E.D.N.Y. Docket No. 15-CR-0043 (FB)
Investigators Stop Former Department of Veterans Affairs Employee from Selling Personal Information of Veterans and Federal EmployeesRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today the unsealing of an indictment charging Phillip Hill, 32, of Benton, a former Department of Veterans Affairs (VA) database manager, with attempting to sell the personal information of veterans and VA employees.
The indictment, returned by a grand jury in the Eastern District of Arkansas on January 9, 2018, and unsealed today, charges Hill with attempted trafficking of access devices (i.e., social security numbers), aggravated identity theft, and possession of device-making equipment. Hill was previously arrested on December 17, 2017, and charged via complaint on December 18, 2017. Today Hill appeared before United States Magistrate Judge Joe J. Volpe and was released on bond. Trial is set for March 5, 2018.
The investigation revealed that Hill offered to sell the personal data of veterans, their dependents, and VA employees for $100,000 to a confidential source working with law enforcement. Hill was terminated by the VA on December 6, 2017. After being fired from the VA, Hill said he could still access the information remotely with a VA computer in his possession, or by stealing a VA server. Hill was arrested outside a secure area at the VA that housed the data he was offering for sale. Law enforcement officers executing a search warrant found a VA computer in Hill’s home.
“Mr. Hill tried to use his position and skills to enrich himself at the expense of veterans who have honorably served our country, and the VA employees working to serve them,” Hiland said. “This indictment reflects our commitment to defending our veterans and federal employees from those who take advantage of their public service by illegally accessing and selling their personal information. It will not be tolerated and will be prosecuted to the fullest extent of the law.”
Law enforcement officers arrested Hill before he could sell the VA data. Through a variety of investigative methods, investigators also discovered that Hill committed aggravated identity theft by using the personal information of another person, and illegally possessed blank identification cards.
The maximum penalty for trafficking in social security numbers is up to 10 years’ imprisonment and three years of supervised release. The penalty for aggravated identity theft is two years’ imprisonment and one year of supervised release. The maximum penalty for possessing access device-making equipment is up to 15 years’ imprisonment and three years of supervised release. Additionally, each of these offenses is also punishable by a fine of not more than $250,000.
The case is being investigated by the Department of Veterans Affairs, Office of Inspector General, and United States Secret Service. It is being prosecuted by Assistant United States Attorneys Ali Ahmad and Hunter Bridges.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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Individual Who Compromised over 1,000 Email Accounts at A New York City University Sentenced to 6 Months in PrisonRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JONATHAN POWELL was sentenced yesterday to six months in prison for computer fraud in connection with his scheme to obtain unauthorized access to more than 1,000 email accounts maintained by a New York City-area university in order to download sexually explicit photos and videos. POWELL previously pled guilty to the charge on August 9, 2017, in Manhattan federal court before United States District Judge Alison J. Nathan, who also imposed POWELL’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Jonathan Powell used his computer skills to breach the security of a university to gain access to their students’ personal accounts. Once Powell had access, he searched the accounts for compromising photos and videos. No college student should have to fear that personal, private information could be mined by strangers for potentially compromising material.”
According to the allegations in the Information to which POWELL pled guilty, a criminal complaint filed against POWELL and other filings made in the case, and statements made during the plea and other proceedings in the case:
From October 2015 up to September 2016, POWELL obtained unauthorized access to email accounts hosted by a U.S.-based university, which has its primary campus in New York, New York (“University-1”). POWELL obtained unauthorized access to these accounts by accessing the password reset utility maintained by the email servers at Univeristy-1, which was designed to allow authorized users to reset forgotten passwords to accounts. POWELL utilized the password reset utility to change the email account passwords of students and others affiliated with University-1. Once POWELL gained access to the compromised email accounts (the “Compromised Accounts”), he obtained unauthorized access to other password-protected email, social media, and online accounts to which the Compromised Accounts were registered, including, but not limited to, Apple iCloud, Facebook, Google, LinkedIn, and Yahoo! accounts.
Specifically, using the Compromised Accounts, POWELL requested password resets for linked accounts hosted by those websites (the “Linked Accounts”), resulting in password reset emails being sent to the Compromised Accounts, which allowed POWELL to change the passwords for the Linked Accounts. POWELL then logged into the Linked Accounts and searched within the Linked Accounts, gaining access to private and confidential content stored in the Linked Accounts. In one instance, POWELL searched a University-1 student’s linked Gmail account for digital photographs and for various lewd terms. The Government’s investigation ultimately revealed that POWELL accessed the Compromised and Linked Accounts in order to download sexually explicit photographs and videos of college-aged women.
An analysis of University-1 password reset utility logs and other data revealed that POWELL accessed the University-1 password reset utility approximately 18,640 different times between October 2015 and September 2016. During that time, POWELL attempted approximately 18,600 password changes in connection with approximately 2,054 unique University-1 email accounts, and succeeded in making approximately 1,378 password changes in connection with approximately 1,035 unique University-1 email accounts, in some cases compromising the same email account multiple times.
Additional investigation revealed that POWELL had also compromised 15 email accounts hosted by a second university located in Pennsylvania. In a post-arrest statement made to investigating agents, POWELL additionally admitted to compromising email accounts at several other educational institutions located in Arizona, Florida, Ohio, and Texas.
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In addition to the prison term, POWELL, 30, Phoenix, Arizona, was sentenced to two years of supervised release and ordered to pay $278,855 in restitution.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Christopher J. DiMase is in charge of the prosecution.
Indiana Man Sentenced to 20 Years in Prison for Travelling Across State Lines to Engage in Sex with MinorsRead the Press Release
LOUISVILLE, Ky. – Today, United States District Judge David J. Hale sentenced a Lexington, Indiana, man to 20 years in prison followed by 20 years of Supervised Release for violating federal child exploitation laws, announced United States Attorney Russel M. Coleman. There is no parole in the federal system.
Last September, Jeffrey Lee Justice, 57, pled guilty to travelling from Indiana to Kentucky to engage in sexual activity with a 14-year-old girl. According to the plea agreement and other court records, law enforcement officials became aware of Justice’s conduct as the result of an online undercover operation.
On November 22, 2016, an investigator with the Kentucky Attorney General’s Department of Criminal Investigations, acting in undercover capacity, created a Craigslist ad in Louisville, Kentucky, under the personals tab. The ad did not include any statement requesting sexual contact from responders. That same day, Justice contacted the investigator through the Craigslist e:mail server. During the communications, the investigator stated that he was a caretaker for two minor children. Justice requested to meet the children for sexual activity.
Justice, who lived in Indiana, arrived at the agreed upon location. Law enforcement officials watched him drive into the parking lot in Jefferson County, Kentucky, on November 28, 2016. Justice had an LG VS425 smartphone in his possession at the time of his arrest. A state search warrant executed on the phone revealed that it was the device used to communicate with the investigator.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Kentucky Office of Attorney General’s Department of Criminal Investigations conducted the investigation.
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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.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Illinois Man Sentenced to Federal Prison for Robbing Two Texas BanksRead the Press Release
In El Paso yesterday afternoon, a federal judge sentenced 21-year-old Reiquon Gaines of Evanston, IL, to 30 months in federal prison followed by three years of supervised release and ordered him to pay a combined $15,853 in restitution for two bank robberies in the Western District of Texas, announced United States Attorney John F. Bash, FBI Special Agent in Charge Emmerson Buie, El Paso Division, and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
On September 1, 2017, Gaines pleaded guilty to two counts of aiding and abetting bank robbery by force or violence. By pleading guilty, Gaines admitted to serving as the getaway driver following the robberies of the United Bank of El Paso Del Norte in El Paso on September 9, 2016, and the Texas Partners Federal Credit Union in Copperas Cove, TX, on November 15, 2016.
On July 17, 2017, a federal judge sentenced Gaines’s co-defendant, 21-year-old Shawn Anthony Williams of El Paso, to 21 months in federal prison after pleading guilty to conspiring to commit the El Paso bank robbery. Gaines’s other co-defendant, 23-year-old Jerrious Javonte Jackson of Killeen, TX, is currently in custody in Illinois facing federal charges in connection with two bank robberies in Illinois as well as the Copperas Cove bank robbery.
FBI special agents in El Paso and in Waco investigated this case. Assistant United States Attorneys Shane Wagman in El Paso and Greg Gloff in Waco prosecuted this case.
Honduran National Charged with Illegal ReentryRead the Press Release
U.S. Attorney Duane A. Evans announced that MARVIN OYUELA LOPEZ, age 30, a citizen of Honduras, was charged today in a one-count indictment with illegal reentry of a removed alien, in violation of 8 U.S.C. ' 1326(a).
According to the indictment, MARVIN OYUELA LOPEZ reentered the United States after having been previously removed on December 10, 2013.
If convicted, MARVIN OYUELA LOPEZ faces a maximum term of imprisonment of ten years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
U. S. Attorney Evans reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Evans praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis is in charge of the prosecution.
Haltom’s Jeweler Robber Sentenced to 262 Months in Federal PrisonRead the Press Release
FORT WORTH — Willie Thompson, Jr., 53, of Oklahoma City, Oklahoma, was sentenced this week by U.S. District Judge Reed C. O’Connor to serve a total of 262 months in federal prison, following his guilty plea in August 2017 to his role in the conspiracy to rob Haltom’s Jewelers in Grapevine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Thompson pleaded guilty to one count of interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence. He has been in custody since April 2017 on a related federal complaint.
According to plea documents filed in the case, on October 3, 2014, Thompson, along with co-defendants Garland Gilmore Lenoir III, Melvin Lewis Andrews, Tony Eugene Gabriel and Kim Yvette Brown, traveled to Haltom’s Jewelers in a stolen vehicle. Andrews, Lenoir, Thompson and Gabriel, entered the store wearing masks and carrying handguns and hammers. Thompson held a store employee in a back room at gunpoint while Andrews, Lenoir, and Gabriel smashed the display cases with hammers and stole merchandise, to include jewelry and watches.
The FBI and Grapevine Police Department investigated the case. Special Assistant U.S. Attorney Dan Cole was in charge of the prosecution.
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Hagerstown Woman Sentenced to Two Years in Prison for Aggravated Identity TheftRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – United States District Judge Catherine C. Blake has sentenced Kimberly Duckfield a/k/a “Sincere,” age 31, of Hagerstown Maryland to two years in prison followed by one year of supervised release after Duckfield pleaded guilty to aggravated identity theft.
The sentence 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, Baltimore Field Office; Commissioner Darryl De Sousa of the Baltimore City Police Department; Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services (DPSCS); and the National Security Agency Police.
According to her plea agreement, Duckfield was married to her co-defendant, Dontae Small. Small was convicted by a federal jury in November 2016 for carjacking and destruction of government property. Small fled from police and drove the carjacked vehicle into the gates of the National Security Agency, causing a massive shutdown, in October 2015.
On January 4, 2016, officers from DPSCS Intelligence Division searched Small’s cell and found two inmate manufactured knives, commonly referred to as “shivs,” in the light fixture. Unknowingly, one of the officers had dropped his debit card in the cell, though it was returned to him shortly after the search. Small provided the stolen debit card number to Duckfield who then used the card to make fraudulent charges. On March 23, 2016, a federal search warrant was executed at Duckfield’s home in Hagerstown, where agents found and seized the items purchased with the stolen card as well as the phone and tablet used to commit the fraud. Duckfield was ordered to pay restitution to the bank in the amount of $286.
Small is scheduled for sentencing in the carjacking case at 10:00 a.m. on May 1, 2018 before United States District Judge James K. Bredar, and for trial in the fraud and identity theft case on April 16, 2018 at 9:30 a.m. before Judge Blake.
Acting United States Attorney Stephen M. Schenning commended FBI, BPD, DPSCS and the NSA Police for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Sandra Wilkinson and Paul Riley, who are prosecuting the case.
Guatemalan National Sentenced for Illegal ReentryRead the Press Release
BOSTON – A Guatemalan national was sentenced today in federal court in Boston to a federal immigration charge.
Selvin Danilo Herrera-Arana, 33, was sentenced by U.S. District Court Judge Leo T. Sorokin to 18 months in prison, three years of supervised release and will be subject to deportation proceedings upon completion of his sentence. In October 2017, Herrera-Arana pleaded guilty to one count of unlawful reentry of a deported alien.
In July 2017, Herrera-Arana was arrested in Lynn and determined to be illegally present in the United States, having previously been deported on three different occasions: April 7, 2009, following a conviction for resisting arrest; Sept. 4, 2012, following a conviction for resisting arrest; and Sept. 9, 2014, following a conviction for illegal reentry.
United States Attorney Andrew E. Lelling and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit prosecuted the case.
Fresno Man Indicted for Illegally Possessing and Dealing FirearmsRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment against James Bowen, 39, of Fresno, today charging him with being a felon in possession of a firearm, engaging in the business of dealing firearms without a license, and possession of an unregistered firearm, U.S. Attorney McGregor W. Scott announced.
“The injection of firearms into our communities through illegal sales like the ones charged in today’s indictment pose a serious public safety threat,” said U.S. Attorney Scott. “The U.S. Attorney’s Office will continue to collaborate with our state, local and federal partners to enforce gun laws that keep guns out the hands of criminals.”
“Public safety is at the forefront of ATF’s mission,” said Special Agent in Charge Jill Snyder, ATF, San Francisco Field Division. “It is our duty to make this community a safer place for families. When law enforcement agencies create a unified front against violent crime, operations, like this one, will be successful.”
According to court documents, between February 23, 2017, and January 16, 2018, it is alleged that Bowen was engaged in the business of dealing firearms without a license. On January 16, 2018, a search warrant was issued for Bowen’s residence and 221 firearms were seized: 85 rifles, 35 shotguns, 94 pistols, five suspected silencers, one suspected machine gun, and one full auto sear. Bowen has a prior felony conviction and is prohibited from possessing firearms.
If convicted, Bowen faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for being a felon in possession of a firearm and possessing an unregistered firearm. The maximum statutory penalty for engaging in the business of dealing firearms without a license is five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is part of the PSN (Project Safe Neighborhoods) strategy, a nationwide strategy for using existing resources to most effectively combat violent crime in partnership with state, local and tribal law enforcement and the communities we serve. This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives with the assistance of the Multi-Agency Gang Enforcement Consortium (MAGEC) whose members come from the Fresno Police Department, the Fresno County District Attorney’s Office, the Fresno County Sheriff’s Office, the California Highway Patrol, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Kimberly A. Sanchez is prosecuting the case.
Founder and CEO of Wright Time Capital Group Sentenced to 21 Months in Prison for Commodities FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL S. WRIGHT was sentenced today by U.S. District Judge Paul A. Engelmayer to 21 months in prison for commodities fraud in connection with WRIGHT’s operation of an investment fund, Wright Time Capital Group (“WTCG”). WRIGHT misrepresented the historical trading performance of WTCG, and misappropriated a large amount of investor funds. After depleting most of the funds actually invested through losing forex trades, WRIGHT began operating WTCG as a Ponzi scheme by obtaining funds from investors that were then used to make payments to earlier investors who had demanded the return of investments.
U.S. Attorney Geoffrey S. Berman said: “Michael Wright took advantage of the trust his investors placed in him. Instead of acting in his investors’ best interests, he lied to them by issuing fraudulent account statements to hide losses and ultimately operating WTCG as Ponzi scheme. Wright has now been held to account for his fraudulent scheme.”
According to the Complaint, the Indictment, and other statements made in court proceedings:
WRIGHT started WTCG in January 2011, and ultimately obtained close to $400,000 in investments from victims (the “Victims”). While WRIGHT did initially execute some forex trades on behalf of the Victims, he then began to steal their money, using investor funds for personal expenses, including hotel stays, travel, and tattoos. From the outset of WTCG, WRIGHT misrepresented to WTCG’s investors the gains he had achieved. WRIGHT claimed in statements to Victims that he had achieved double-digit gains through forex trading in WTCG’s first six months of existence. In reality, WRIGHT earned little to no money through his forex trading. In fact, after losing Victim funds in bad forex trades, WRIGHT sent them falsified account statements hiding these losses. Ultimately, WRIGHT operated WTCG as a Ponzi scheme, using Victim funds to make payments to other Victims who were demanding the return of their investments.
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In addition to the prison term, WRIGHT, 30, of Rockville Centre, New York, was sentenced to three years of supervised release and ordered to pay $358,000 in restitution.
Mr. Berman praised the efforts of the Federal Bureau of Investigation in this case.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Jacob Warren is in charge of the prosecution.
Fort Thompson Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Ron Parsons announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Jordan Traversie, age 27, was indicted on January 17, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 22, 2018, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum period of 5 years, up to life, of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between October 23, 2017, and November 1, 2017, Traversie, a person required to register under the Sex Offender Registration and Notification Act, knowingly failed to register and update his registration.
The charge is merely an accusation and Traversie is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Traversie was remanded to the custody of the U.S. Marshals Service pending trial, which has not been set.
Former Virginia Detective Sentenced to 23 Years in Prison for Sexually Exploiting MinorsRead the Press Release
A former Virginia detective with the Madison County Sheriff’s Office, who was most recently assigned to the Internet Crimes Against Children Task Force, was sentenced today in the U.S. District Court for the Western District of Virginia in Charlottesville for multiple charges of sexually exploiting minors, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Rick A. Mountcastle for the Western District of Virginia announced.
Bruce Arlie Harvey, 42, of Reva, Virginia, pleaded guilty on Aug. 14, 2017, and was sentenced on Jan. 25, to 276 months in prison for three counts of transporting a minor across state lines with the intent to engage in criminal sexual acts, three counts of interstate travel with minors with the intent to engage in illicit sexual conduct and one count of possession of child pornography.
According to the information presented during the guilty plea and during the sentencing hearing, Harvey, while a karate instructor at the Virginia Tong Leong School of Karate in Madison, Virginia, began making sexual advances toward the two minor female victims in this case while they were students at the karate school. Harvey engaged in illegal sexual acts with these children after he began giving them private karate lessons and began traveling with each of them to karate competitions and other events at various out-of-state locations, including California and Maryland. This conduct took place between 1998 and 2007.
Additional evidence presented during the guilty plea revealed that at the time of his arrest on May 3, 2017, investigators recovered a Sony microcassette in a bedroom closet that contained a film clip dated Feb. 14, 2007, that showed one of the victims performing a sexual act with Harvey in his Madison County home.
The FBI and the Virginia State Police investigated this case. Assistant U.S. Attorney Nancy S. Healey and Trial Attorney Lauren S. Kupersmith of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted this 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 http://www.justice.gov/psc.
Former New York Giants Player Sentenced to 2 Years in Prison in Connection with a $1.5M Insurance Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Marcus Buckley, 46, of Weatherford, Texas, was sentenced today by U.S. District Judge Troy L. Nunley to two years in prison and ordered to pay over $1.58 million in restitution, U.S. Attorney McGregor W. Scott announced.
According to court documents, Buckley played professional football in the National Football League for seven seasons between 1993 and 2000 with the New York Giants. During this time, the Giants had workers’ compensation insurance coverage through Pennsylvania Manufacturer’s Association Insurance Group (PMA).
In 2006, Buckley filed a worker’s compensation claim against the Giants for cumulative stress injuries sustained while playing football, in part, in California. During the first week of November 2010, Buckley, the Giants, and PMA settled the Buckley claim for $300,000 pursuant to a “Compromise and Release” Agreement.
After Buckley’s claim had been settled, between late 2010 and June 2011, Buckley prepared and filed numerous requests for additional reimbursement under his claim. As part of these requests, Buckley prepared false invoices and statements from medical providers for medical services purportedly provided to him. Other times, Buckley prepared false credit collection notices from collection agencies purportedly seeking payment from Buckley from various medical providers for past due medical bills. Buckley transmitted the false invoices, statements and credit collection letters to his co-defendant, Kimberly Jones, who was a claims adjuster at Gallagher Bassett Services Inc. in its Sacramento office. Gallagher Bassett was a third-party administrator that managed, among other things, workers’ compensation claims in California on behalf of PMA. Jones was aware that Buckley was not entitled to additional reimbursement under his disability claim and that the submitted documentation and requests were false. Jones caused the issuance of Gallagher Bassett checks payable to Buckley, and Buckley ultimately received over $1,588,000 in funds to which he was not entitled.
During the sentencing hearing, Judge Nunley found that Buckley engaged in a massive amount of fraud and caused serious reputational damage to the victim, Gallagher Bassett. Judge Nunley also said that Buckley’s actions were rooted in greed.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Michael M. Beckwith is prosecuting the case.
Jones is scheduled to be sentenced on February 8, 2018, by U.S. District Judge Troy L. Nunley. Jones faces a maximum sentence of 20 years in prison, a fine of $250,000 or twice the gross gain or loss in the case, and a three-year term of supervised release. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Chairman of Board of Trustees for South Carolina State Resentenced to 4 Years in Federal PrisonRead the Press Release
Columbia, South Carolina --- United States Attorney Beth Drake announced that Jonathan Pinson, age 47, of Greenville, South Carolina, was resentenced today in federal court in Charleston, South Carolina, for Conspiracy to Commit Wire Fraud (Counts 12, 18), Mail Fraud (Counts 25, 26), Wire Fraud (Counts 27-34), Money Laundering (Counts 35-41) and False Statements (Counts 43-46 and 48-50). United States District Judge David C. Norton sentenced Mr. Pinson to 48 months concurrent on each count of conviction, to be followed by 3 years supervised release. Judge Norton imposed restitution in the amount of $337,843.05.
In June 2014, a jury convicted Mr. Pinson for his involvement in four different schemes. One scheme revolved around the 2011 homecoming concert at SCSU and Mr. Pinson’s efforts to steer the concert promotion contract to his close friend and former SCSU roommate in exchange for a kickback.
Other schemes included Mr. Pinson’s theft of government funds earmarked for the installation of a diaper plant in Marion County. Evidence showed that proceeds from the grant, intended to create jobs in rural Marion County, were instead pocketed by Mr. Pinson and his associates, Lance Wright, Tony Williams, and Phil Mims, each of whom pled guilty to charges related to the fraud.
Mr. Pinson was also convicted of theft of government funds received from a 10 million dollar American Recovery and Reinvestment Act (ARRA) grant (commonly known as stimulus money) intended for the development known as the Village at Rivers Edge (VRE).
In the final scheme Mr. Pinson again used his position as Chairman of the Board of SCSU to influence officials at SCSU to purchase land known as “Sportsman’s Retreat”. The seller of the property, Richard Zahn, Pinson’s business partner, testified that he agreed to pay a kickback to Mr. Pinson in the form of a new Porsche Cayenne, an SUV valued at approximately 90 thousand dollars.
During the two and one-half week trial, the Government called twenty witnesses, introduced approximately 200 exhibits and played 118 secretly recorded telephone calls. The calls, authorized by a court ordered wiretap, covered from July 21 to November 20, 2011.
Mr. Pinson was originally sentenced on May 20, 2015. He appealed and the Fourth Circuit Court of Appeals vacated his conviction on three of the counts of conviction, necessitating a resentencing hearing.
The case was investigated by agents of the Federal Bureau of Investigation (FBI), State Law Enforcement Division (SLED), Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) and Internal Revenue Service, Criminal Investigations (IRS-CI). Assistant United States Attorneys Dewayne Pearson, J.D. Rowell, Jane Taylor, and Nancy Wicker of the Columbia office prosecuted the case.
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Florida Man Sentenced for Cocaine DistributionRead the Press Release
BOSTON – A Tampa, Fla., man was sentenced today in federal court in Springfield for distributing cocaine.
Angel Martinez, 40, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 20 months in prison and three years of supervised release. In September 2017, Martinez pleaded guilty to distributing cocaine in Springfield on May 19, 2015. Martinez’s conviction was part of an 11-month investigation into cocaine, heroin, and firearms trafficking in the Springfield area by members of the Latin Kings street gang. The investigation resulted in the arrest of 16 individuals in 2015 for federal drug and firearms offenses.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts State Police and the Springfield and Holyoke Police Departments provided assistance with the investigation. Assistant U.S. Attorney Katharine A. Wagner of Lelling’s Springfield Branch Office prosecuted the case.
Federal jury finds Detroit man guilty of heroin conspiracyRead the Press Release
HUNTINGTON, W.Va. – A federal jury sitting in Huntington returned a guilty verdict today in the trial of a Detroit man for his role in a Huntington heroin conspiracy, announced United States Attorney Mike Stuart. Charles Duncan Pippins, 49, of Detroit, was convicted of conspiracy to distribute 100 grams or more of heroin following a jury trial that began on Tuesday. Last week, Pippins pled guilty to the other indicted charges – one count of distributing heroin and one count of possessing heroin with intent to distribute.
“I want to commend the outstanding work of the Cabell County Sheriff’s Department and our prosecutors, AUSAs Joe Adams and Matt Davis, who tried this case,” said U.S. Attorney Stuart. “We are dedicated to working night and day to make sure we stop this drug scourge.”
Witnesses for the United States testified that from the summer of 2013 to September 2016, Pippins conspired with others to distribute over 100 grams of heroin in the Huntington area. The evidence showed that during the course of the conspiracy, Pippins recruited multiple co-conspirators who transported heroin on his behalf from his residence in Detroit to Huntington. Witnesses testified that Pippins used the same individuals to distribute heroin, and to rent hotel rooms in their names, which he used for selling heroin. The evidence further showed that Pippins would front heroin to individuals to sell, and that they would bring the cash proceeds back to him at hotels in Huntington or at his residence in Detroit.
Pippins pleaded guilty last week to the other indicted charges, admitting that on September 12, 2016, deputies with the Cabell County Sheriff’s Department used a confidential informant to make a controlled purchase of heroin from Pippins. The informant traveled to the Days Inn Hotel located on U.S. Route 60 in Huntington, where Pippins distributed heroin to the informant. Deputies executed a search warrant on his room, and as agents entered, Pippins flushed heroin down the toilet. During the search of the room, deputies seized approximately six grams of heroin that Pippins admitted he intended to sell. An analyst with the West Virginia State Police Forensic Laboratory confirmed that the heroin was mixed with fentanyl, a powerful opiate painkiller.
Pippins faces at least five and up to 40 years in federal prison for the heroin conspiracy. He also faces up to 20 years in federal prison for each of the other two drug charges. The sentencing is scheduled for April 30, 2018.
United States District Judge Robert C. Chambers presided over the trial.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Federal grand jury indicts Shreveport businessman for defrauding $96 million from investors and financial institutionsRead the Press Release
SHREVEPORT, La. – United States Attorney Alexander C. Van Hook announced that a federal grand jury returned a five-count indictment charging a Shreveport businessman with scamming more than $96 million from investors and financial institutions.
David D. deBerardinis, 56, of Shreveport, was charged with four counts of wire fraud and one count of attempted bank fraud. According to the indictment, from 2008 to 2016, deBerardinis falsely represented himself through the use of fake documents, identities, business transactions and other false information to obtain more than $96 million from investors and lending institutions. He operated numerous business entities and represented himself as part of the petroleum industry involved in the sale, trade and transport of fuel. The defendant created fraudulent documents, including fake bank statements, fake checks, fuel trade agreements, promissory notes, tolling agreement letters, news articles, in-line production tickets and other fake documents to misrepresent his business activities to investors. He even disguised himself as an Orthodox Jewish businessman at one point while trying to obtain investor funds from a New York-based private equity group after hiring a professional makeup artist. He also falsely claimed to have obtained an international shippers’ license, which required vetting by the FBI and Department of Homeland Security. Through these false statements and omissions to investors, deBerardinis obtained millions of dollars from investors in Shreveport, Louisiana and elsewhere.
The defendant faces 20 years in prison for the wire fraud counts and 30 years in prison for the attempted bank fraud count. He also faces a $1 million fine, restitution, forfeiture, and five years of supervised release for each count.
The FBI, U.S. Secret Service and the Caddo Parish Sheriff’s Office investigated the case. Assistant U.S. Attorneys Cytheria D. Jernigan, Christopher J. Stokes, Joseph A. Magliolo and Seth D. Reeg are prosecuting the case. The investigation and prosecution of this case has been a cooperative endeavor between the U.S. Attorney’s Offices in Shreveport and Dallas.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Federal Prisoner Pleads Guilty to Possessing a WeaponRead the Press Release
Jackson, Miss. – Joseph Shaw, 35, a federal inmate, pled guilty today, before United States District Judge Henry T. Wingate, to possession of a weapon within a federal prison, announced U.S. Attorney Mike Hurst.
On June 21, 2017, during a routine search, federal correctional officers at the United States Penitentiary in Yazoo City, Mississippi, discovered Shaw in possession of a weapon. The weapon, a sharpened piece of plastic approximately 5.5 inches long, was confiscated.
Shaw will be sentenced in Jackson by Judge Wingate on May 21, 2018, at 9:30 a.m. He faces a maximum penalty of five additional years in prison and a $250,000 fine.
The case was investigated by the Federal Bureau of Prisons, Special Investigative Section. It is being prosecuted by Assistant United States Attorney Jennifer Case and Special Assistant United States Attorney Woelke Leithart.
Federal Jury Convicts Two Gang Members with being unlawful users of Controlled Substance in Possession of FirearmsRead the Press Release
Memphis, TN – After a two and a half-day trial, a jury has convicted two gang members of illegally possessing firearms. D. Michael Dunavant, United States Attorney for the Western District of Tennessee, announced the conviction today.
According to the information presented at trial, on May 27, 2017, detectives with the Multi-Agency Gang Unit were conducting patrols at the Breath of Life Christian Center, 3795 Raleigh-Frayser, during the funeral of a known gang member. While at the scene, detectives observed a silver Toyota Camry enter the church parking lot. The driver exited and three other occupants remained in the vehicle. Jamal Bowens, 19, was seated in the rear driver side seat, and Lee Hope, 21, in the rear passenger’s seat. The defendants are known gang members who regularly use controlled substances.
Detectives approached the vehicle and immediately smelled a strong odor of marijuana. Law enforcement also discovered a marijuana cigar located in the seat between Bowen and Hope and a Rossi .357 revolver on the floorboard under Bowen’s feet. The occupants were then removed from the car. Upon a search of Hope’s person, a stolen Smith and Wesson .40 caliber pistol was recovered.
U.S. Attorney D. Michael Dunavant said: "Based upon Attorney General Sessions’ announced priority for violent crime reduction, this office has resolved to be more aggressive and creative in using all of the applicable federal statutes to charge firearms offenses, and this case is a prime example of that commitment. I want to commend our law enforcement partners as we continue to work together to bring to justice those causing havoc throughout the Western District of Tennessee by the illegal use and possession of firearms. As this conviction demonstrates, if you are a gang member intent on committing crimes with a firearm in this district, rest assured you will be brought to justice. Gun Crime is Max Time."
The defendants face a maximum penalty of ten years in imprisonment and a $250,000 fine. Sentencing is set for April 27, 2018, before the Honorable Sheryl H. Lipman.
Lee Hope currently has cases pending for criminal attempt first-degree murder, in concert, and reckless endangerment with a deadly weapon in Shelby County Criminal Court.
Jamal Bowens has cases pending for aggravated robbery and criminal attempt first-degree murder in Shelby County Criminal Court.
This case was investigated by the Multi-Agency Gang Unit, Memphis Police Department, Shelby County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant U.S. Attorney Marques Young is prosecuting this case on the government’s behalf.
Federal Jury Convicts Three Men of Hobbs Act Robbery and Related Gun ChargesRead the Press Release
St. Thomas, USVI – After a two-day trial, yesterday a federal jury found Ron Delano Kuntz, 42, Keon Wilson, 22, and Shawn McIntosh, 24, guilty of Hobbs Act Robbery, Conspiracy to Commit Hobbs Act Robbery, and Brandishing a Firearm During a Crime of Violence, United States Attorney Gretchen C.F. Shappert, announced.
Kuntz, Wilson, and McIntosh each face up to 20 years for the Hobbs Act robbery and conspiracy charges and an additional consecutive mandatory minimum sentence of seven years for the brandishing of a firearm charge.
According to the evidence presented at trial, Kuntz, Wilson, and McIntosh were members of a group that conspired to rob Gems and Gold Corner Jewelry store on St. Thomas on September 16, 2013. Wilson and McIntosh entered the store and Wilson brandished a firearm before fleeing the store with merchandise. The evidence presented at trial also showed that Kuntz purchased large hats to disguise those who went into the jewelry store, and Kuntz acted as a lookout during the robbery while in communication with other members of the conspiracy.
Three other members of the conspiracy, Shaquille Correa, 22, Jarmaine Ayala, 36, and Wahilli James, 21, pleaded guilty to conspiracy to commit Hobbs Act robbery and related firearm offenses. A seventh defendant is pending trial. The six convicted defendants were remanded to the custody of the U.S. Marshals Service pending sentencing in May 2018.
This case was by the Federal Bureau of Investigation and the Virgin Islands Police Department. It was prosecuted by Assistant United States Attorneys Anna A. Vlasova and Kim L. Chisholm.
Federal Jury Convicts Fredericksburg Heroin DealerRead the Press Release
RICHMOND, Va. – A federal jury convicted a Fredericksburg man today on charges of conspiracy to distribute and possess with intent to distribute a kilogram or more of heroin and of being a felon in possession of a firearm.
According to court records and evidence presented at trial, Dustin Washington, 35, joined a conspiracy in late 2014 with several other individuals to sell heroin in the Fredericksburg and Spotsylvania County areas. Over the course of the conspiracy Washington sold fentanyl, a more potent, synthetic form of heroin, at least three times, including twice to an undercover officer. Subsequently, law enforcement used a confidential source to make approximately 12 controlled purchases of heroin from Washington in 2016. Audio recordings made during the controlled purchases revealed that Washington used other members of the conspiracy to provide him heroin to sell. On April 17, 2017, law enforcement executed search warrants on the homes of two other co-conspirators, finding more than 75 grams of heroin, and large quantities of cocaine and Molly. While executing a search warrant on Washington’s vehicle, law enforcement found an AR-15 rifle in the trunk. From 2014 through 2017, Washington and his co-conspirators distributed and possessed with the intent to distribute more than 1 kilogram of heroin.
Washington faces a mandatory minimum sentence of 10 years in prison on the conspiracy charge and a maximum sentence of 10 years in prison on the firearm charged when sentenced on May 4. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, and Colonel Gary T. Settle, Superintendent of Virginia State Police, made the announcement after U.S. District Judge Henry E. Hudson accepted the verdict. Assistant U.S. Attorney Stephen E. Anthony is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-104.
Federal Judge Sentences Former Eagle Pass C.B.P. Officers in Marriage Fraud SchemeRead the Press Release
In Del Rio today, a federal judge sentenced two former U.S. Customs and Border Protection officers at the Eagle Pass Port of Entry for participating in a marriage fraud scheme announced United States Attorney John F. Bash; Special Agent in Charge Javier Enriquez, Customs and Border Protection Office of Professional Responsibility (CBP-OPR), El Paso Field Office; and, U.S. Citizenship and Immigration Services (USCIS) District Director Mario Ortiz.
United States District Judge Alia Moses sentenced 46-year-old Isabel Metzler to six months in federal prison followed by three years of supervised release. Judge Moses also sentenced Metzler’s husband, 37-year-old Luis Morales, to five years probation. Furthermore, Judge Moses ordered that Metzler and Morales pay fines of $7,500 and $5,000, respectively.
On July 27, 2017, Judge Moses sentenced a co-defendant in this case, Nancy Chan, to 12 months imprisonment. On January 19, 2017, a federal jury convicted Chan, a citizen of the United Kingdom and former City of Austin employee, of one count of conspiracy to commit marriage fraud and one count of conspiracy to commit mail fraud. During Chan’s two-day trial Metzler pleaded guilty to conspiracy to commit marriage fraud; Morales pleaded guilty to one count of making a false statement to a federal agent.
Testimony during trial revealed that after discussing her immigration status with her friend, Isabel Metzler, Nancy Chan entered into a fraudulent marriage agreement with a person known to Metzler and Morales for the purpose of becoming a lawfully permanent resident. On March 2, 2011, in Maverick County, Chan married the U.S. citizen. In 2014, Chan and her legal spouse submitted false documentation to obtain Lawfully Admitted Permanent Resident (LAPR) status for Chan and to seek naturalization. Chan and her spouse were subsequently interviewed separately by a USCIS officer to determine the validity of their marriage. Their answers to questions posed by the officer contained numerous inconsistencies, which revealed that the marriage was a sham.
By pleading guilty, Metzler admitted to her role in setting up and attempting to conceal the fraudulent marriage scheme. Morales admitted that on February 9, 2016, he lied to CBP-OPR investigators about his knowledge of the marriage fraud scheme and for convincing Chan’s spouse to maintain the marriage charade to authorities.
CBP-OPR, together with the USCIS, FBI and the Austin Police Department, investigated this case. Assistant United States Attorneys Todd Keagle, Chris Blanton, and Patrick Burke prosecuted this case on behalf of the government.
Federal Grand Jury Indicts Nova Charter School Chief Executive Officer and a Dallas Man for Conspiracy to Commit Wire and Mail FraudRead the Press Release
DALLAS – An indictment returned by a federal grand jury in Dallas last month, and unsealed earlier this month, charges Donna H. Woods, 63, of DeSoto, Texas, and Donatus I. Anyanwu, 59, of Dallas, Texas, with offenses related to a scheme to defraud a program used by needy schools to obtain affordable telecommunications and internet access, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
Specifically, Woods is charged with one count of conspiracy to commit mail fraud and wire fraud, and three counts of wire fraud. Anyanwu is charged with one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud. Both defendants will remain on bond pending trial, which is set for March 5, 2018.
The indictment alleges that Woods, the Chief Executive Officer of Nova Charter School (Nova), and Anyanwu, the owner of ADI Engineering, Inc. (ADI), devised a scheme to defraud the Federal Communications Commission’s “E-Rate” program, which helps schools and libraries in the United States obtain affordable telecommunications and internet access. Woods used her position at Nova to select ADI as Nova’s E-Rate service provider, a bid worth approximately $478,000. In return for ADl’s selection as Nova’s E-Rate service provider, Woods received a kickback of at least $5,000 from Anyanwu.
The indictment further alleges that Woods and Anyanwu perpetuated the fraud by falsifying forms indicating that Nova had complied with E-Rate program rules and that no kickbacks were paid. Over the course of the conspiracy, ADI was paid approximately $337,951.06 in E-Rate discount funds that it was not entitled to receive.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, however, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property traceable to the offense.
The case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Russell Fusco and Marcus Busch are prosecuting the case.
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