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28 December 2017
United States Reaches Settlement with Elkton Internist to Resolve False Claims Act Allegations Relating to Medically Unnecessary ProceduresRead the Press Release
FOR IMMEDIATE RELEASE CONTACT ELIZABETH MORSE
www.justice.gov/usao/md (410) 209-4885
Baltimore, Maryland – Jui Chih Hsu, M.D., an internist in Elkton, has agreed to pay the United States $1,222,222.00 to settle claims that she submitted false claims to the United States for medically unnecessary injections and evaluation and management services that were not documented.
The settlement agreement was announced today by Acting United States Attorney for the District of Maryland Stephen M. Schenning, Nick DiGuilio, Special Agent in Charge of the Office of Inspector General for the Department of Health and Human Services and Maryland Attorney General, Brian Frosh.
In her practice, Dr. Hsu administered Vitamin B12 and Vitamin B complex injections. Medicare and Medicaid will reimburse Vitamin B12 injections in very limited circumstances, including in patients with pernicious anemia after a documented history of a failed course of Vitamin B tablets. Medicare and Medicaid do not cover Vitamin B12 injections. Additionally in her practice, Dr. Hsu performed routine evaluation and management services for her patients. Medicare and Medicaid do not reimburse for evaluation and management services that are done in conjunction with an injection because a provider is reimbursed for the evaluation needed to do the injection when the provider is reimbursed for the injection itself. Medicare and Medicaid will pay for evaluation and management service that is distinct from an injection procedure. Providers can signify that he or she did a separate and distinct evaluation and management service by using the modifier -25 when submitting the claim for payment.
According to the settlement agreement, Dr. Hsu submitted claims to Medicare and Medicaid for medically unnecessary injections of Vitamin B12 for treatment of chronic fatigue, a condition where reimbursement for Vitamin B12 injections is not permitted. Additionally, Dr. Hsu misrepresented to Medicare and Medicaid that the Vitamin B Complex injections, which are not covered by Medicare and Medicaid, were injections of Thiamine, which is covered by Medicare and Medicaid. Finally, Dr. Hsu inappropriately billed for evaluation and management services using the modifier -25 (significant, separately identifiable evaluation and management by the same physician on the same day of the procedure or other service) which Dr. Hsu failed to document that she in fact performed a separate and distinct evaluation and management service. Dr. Hsu denied the allegations.
This case arose from a recent initiative inside the U.S. Attorney’s Office. The United States Attorney’s Office has dedicated resources to enable it to review Medicare billing data. The review of that data has enabled the United States Attorney’s Office to identify areas of concern where it appears that billing irregularities may have taken place. Partnering with the affected agencies, the United States Attorney’s Office has developed the ability to investigate these billing irregularities to determine whether the matter is appropriate for treatment under the False Claims Act.
Acting U.S. Attorney Stephen M. Schenning commended the HHS Office of Inspector General for its work in the investigation. Mr. Schenning also thanked Assistant United States Attorney Thomas Corcoran, who handled the case.
Two Romanian Suspects Charged with Hacking of Metropolitan Police Department Surveillance Cameras in Connection with Ransomware SchemeRead the Press Release
WASHINGTON – A criminal complaint and arrest warrants were unsealed today charging two Romanian nationals with a conspiracy to illegally access approximately 123 computers associated with Metropolitan Police Department (MPD) surveillance cameras and to use those computers in connection with a scheme to distribute ransomware in January 2017.
U.S. Attorney Jessie K. Liu for the District of Columbia, and Brian J. Ebert, Special Agent in Charge, Washington Field Office, U.S. Secret Service, made the announcement.
Mihai Alexandru Isvanca, 25, and Eveline Cismaru, 28, of Romania, were arrested on Dec. 15, 2017, at the Otopeni airport in Bucharest, Romania. The complaint was filed under seal on Dec. 11, 2017, in the U.S. District Court for the District of Columbia. Both defendants are charged with conspiracy to commit wire fraud and conspiracy to commit various forms of computer fraud. Isvanca remains in custody in Romania and Cismaru is on house arrest there pending further legal proceedings.
As described in the affidavit in support of the complaint, on Jan. 12, 2017, the Secret Service was notified that a number of MPD surveillance cameras had been compromised. Agents from the Washington Field Office immediately launched an investigation. The investigation uncovered information that the MPD surveillance camera computers were compromised between Jan. 9 and Jan. 12, 2017, and that ransomware variants called “cerber” and “dharma” had been stored on the computers. Other evidence in the investigation revealed a scheme to distribute ransomware by email to at least 179,000 email addresses.
According to the complaint, further investigation showed that the two defendants, Isvanca and Cismaru, participated in the ransomware scheme using the compromised MPD surveillance camera computers, among others. The investigation also identified certain victims who had received the ransomware or whose servers had been accessed during the scheme.
This case was of the highest priority due to its impact on the Secret Service’s protective mission and its potential effect on the security plan for the 2017 Presidential Inauguration. In partnership with MPD’s Chief Technology Office, the Secret Service and MPD quickly ensured that the surveillance camera system was secure and operational prior to the Inauguration and continued to investigate the criminal offenses charged.
The investigation revealed no evidence that any person’s physical security was threatened or harmed due to the disruption of the MPD surveillance cameras.
The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a conspiracy to commit wire fraud is 20 years of incarceration. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The investigation into this matter was conducted by the Secret Service’s Washington Field Office. Assistance was provided by law enforcement partners in the National Crime Agency and Metropolitan Police in the United Kingdom, The Netherland’s National High Tech Crimes Unit, the Romanian National Police (Service for Combating Cybercrime), MPD, and the FBI’s Washington, D.C. and Houston Field Offices. The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance.
The case is being prosecuted by the Cyber Crime Section of the U.S. Attorney’s Office for the District of Columbia.
Two Men Remain in Federal Custody on Federal Complaint for Sex Trafficking a Middle School StudentRead the Press Release
DALLAS — Shenandoah West Moneypenny, 34, of Gladewater, Texas, and Shawn Dale Sanders, 43, of Dallas, Texas, remain in federal custody on a federal criminal complaint for the sex trafficking of a 13-year-old female, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Moneypenny and Sanders are each charged with one count of conspiracy to use, persuade, induce, entice, and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Both defendants were arrested on December 18, 2017 and will remain in federal custody pending trial.
According to the affidavit filed with the criminal complaint, in October 2017, a family member of a 13-year-old minor female (Victim) contacted a Garland Independent School District School Resource Officer after finding communications on the minor’s laptop computer between Victim and adult males. The family brought the laptop computer and Victim’s cellular phone to the School Resource Officer, who previewed the devices and observed sexually explicit communications.
During an interview with law enforcement, according to the affidavit, Victim disclosed that she had sexual contact with up to four adult men who she met online. When asked how she came to communicate with these men, Victim stated that she met a man online named “Aiden” and he put her in contact with other men to “meet up.” Aiden, who was later identified as Moneypenny, began to set up in-person meets for her through Craigslist advertisements that he placed. These advertisements sought men to meet Victim for sex. Responses to the Craigslist ads went directly to Moneypenny’s email account and, once he deemed the responder to be safe for Victim to meet, Moneypenny provided Victim with their contact information.
In August 2017, Victim met Sanders in response to the Craigslist ad. Sanders picked Victim up from the middle school and drove her to a local park where they had sexual conduct. During this meeting Sanders took sexually explicit pictures of Victim and sent them to Moneypenny as a trade-off for setting him up with the Victim. Sanders and Victim met approximately four times after that and engaged in sexual conduct.
Moneypenny received a total of 219 replies to the Craigslist advertisement, including Sanders reply.
A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The penalty for the offense as charged is not less than 15 years or more than 30 years in federal prison, a $250,000 fine and a lifetime of supervised release.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation and Garland Police Department are investigating. Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.
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Six Members of Saint Paul Street Gang “HAM Crazy” Indicted on Federal Firearms ChargesRead the Press Release
Acting United States Attorney Gregory G. Brooker, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Special Agent in Charge Kirk Howard and Saint Paul Police Chief Todd Axtell today announced a federal indictment charging six members of a Saint Paul criminal street gang known as the HAM Crazy for conspiring to illegally possess firearms.
“This indictment represents the aggressive action this Office and our law enforcement partners are taking against gun violence in Saint Paul,” said Acting U.S. Attorney Gregory Brooker. “Working hand-in-hand with our partners at the ATF and Saint Paul Police Department, we are dedicating all necessary resources to investigate and prosecute the most violent offenders. This alarming uptick in gang activity and gun violence will not be tolerated in our cities and communities.”
“There are plenty of ways to settle disagreements between groups, but gun violence is not a method we will allow. The communities of Saint Paul deserve better,” said Acting Special Agent in Charge Kirk Howard of the Saint Paul Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives. “ATF, Saint Paul Police Department and the Department of Corrections have put forth maximum effort to reduce gun violence in Saint Paul. We’re happy to partner with the two agencies in this investigation and hope this indictment provides a word of warning to others who are inclined to be involved in this dangerous behavior.”
Saint Paul Police Chief Todd Axtell said, “Too many families are impacted by gun violence in Saint Paul. We welcome these indictments as they hold gun violence suspects responsible. We will continue to partner with our local and federal law enforcement agencies and rigorously pursue gun offenders whose crimes tear at the fabric of our community.”
According to the superseding indictment, since at least January 2014, defendants MARVELL VOSHON JEFFERSON, a/k/a “Vo,” a/k/a “Lil Vo,” CARMELO MANUEL MARRERO, a/k/a “Melo,” a/k/a “Mello,” CASEY JEMAR DAVIS, a/k/a “Casey Jermar Davis,” a/k/a “K Chop,” SHELBY DELANE ASHFORD, JR., a/k/a “Two Times,” PHILLIP DWAYNE JACKSON, a/k/a “Go,” a/k/a “Kid Go,” and NAKIA MARQUIRE MARTIN, a/k/a “Nakia Marquette Martin,” a/k/a “Freaky,” a/k/a “Freaky Nick,” have maintained active membership in the street gang known as the HAM Crazy. The main purpose of the HAM Crazy gang is to preserve and protect their territory, power, status, and reputation through the use of violence and intimidation against rival Saint Paul gangs, such as the Hit Squad.
According to the superseding indictment, since at least January 2014, the HAM Crazy gang has been in an ongoing gang war with several rival gangs, including the Hit Squad, that has resulted in gang members on both sides of the rivalry being shot and/or killed. HAM Crazy members and their rival gang members often use social media platforms, such as Facebook, YouTube, and Snapchat, as a way to disrespect, intimidate, and threaten rivals by brandishing firearms, displaying money, making gang signs, and publishing rap videos.
According to the superseding indictment, due to the ongoing gang war and the need for firearms to conduct gang-related activity, the defendants conspired to illegally obtain and jointly possess firearms. The defendants and other HAM Crazy members also attempted to buy, sell, trade, and obtain firearms using social media. All six defendants have prior convictions that prohibit them from legally possessing firearms.
According to the superseding indictment, the defendants and other HAM Crazy members conspired to illegally possess at least nine firearms during the timeframe of the superseding indictment.
Five of the defendants, JEFFERSON, DAVIS, ASHFORD, JACKSON, and MARTIN, have made their initial appearances in federal court and have been arraigned on the charges in the superseding indictment. One defendant, MARRERO, remains at large.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Saint Paul Police Department, and the Minnesota Department of Corrections.
Assistant U.S. Attorneys Benjamin Bejar and Thomas Calhoun-Lopez are prosecuting the case.
Defendant Information:
MARVELL VOSHON JEFFERSON, a/k/a “Vo,” a/k/a “Lil Vo,” 23
Saint Paul, Minn.
Charges:
- Conspiracy – Felon in possession of a firearm, 1 count
- Felon in possession of a firearm, 1 count
CARMELO MANUEL MARRERO, a/k/a “Melo,” a/k/a “Mello,” 23
Maplewood, Minn.
Charges:- Conspiracy – Felon in possession of a firearm, 1 count
- Felon in possession of a firearm, 1 count
- Aiding and abetting felon in possession of firearms, 1 count
CASEY JEMAR DAVIS, a/k/a “Casey Jermar Davis,” a/k/a “K Chop,” 23
Saint Paul, Minn.
Charges:- Conspiracy – Felon in possession of a firearm, 1 count
- Aiding and abetting felon in possession of firearms, 1 count
SHELBY DELANE ASHFORD, JR., a/k/a “Two Times,” 23
Columbia Heights, Minn.
Charges:- Conspiracy – Felon in possession of a firearm, 1 count
- Aiding and abetting felon in possession of firearms, 1 count
PHILLIP DWAYNE JACKSON, a/k/a “Go,” a/k/a “Kid Go,” 23
Lino Lakes, Minn.
Charges:- Conspiracy – Felon in Possession of a Firearm, 1 count
- Prohibited person in possession of firearm, 1 count
NAKIA MARQUIRE MARTIN, a/k/a “Nakia Marquette Martin,” a/k/a “Freaky,” a/k/a “Freaky Nick,” 24
Moose Lake, Minn.
Charges:- Conspiracy – Felon in possession of a firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Registered Sex Offender Sentenced to 252 Months in Prison for New Child Porn CrimeRead the Press Release
DAYTON – Jason Alexander Bigler, 46, of Dayton, was sentenced in U.S. District Court to 252 months in prison and a lifetime of supervised release for knowingly distributing child pornography of children under the age of 12. Bigler is a registered sex offender because of a prior federal conviction of possessing child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and members of the FBI’s Child Exploitation Task Force announced the sentence handed down by Senior U.S. District Judge Thomas M. Rose.
According to the statement of facts attached to the plea agreement, which was entered into in September, Bigler distributed, received, transported and possessed more than 2,150 images and 215 videos of child pornography. The images and videos showed adult males raping and abusing pre-pubescent and infant females.
Bigler used Kik and Omegle messenger applications to meet and communicate with the individuals with whom he traded child pornography.
U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Dwight K. Keller, who is representing the United States in this case.
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Okmulgee Man Sentenced to 168 Months, Supervision for Life for Material Involving Sexual Exploitation of MinorsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that John Carl Berryhill, age 53, of Okmulgee, Oklahoma, was sentenced to 168 months imprisonment, and life supervised release for Possession Of Certain Material Involving The Sexual Exploitation Of Minors, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and 2252(b)(2).
The Superseding Indictment alleged that from between on or about January 8, 2014 to on or about February 2, 2017, in the Eastern District of Oklahoma, the defendant, John Carl Berryhill, did knowingly possess, attempt to possess and access with intent to view, matters which contained visual depictions, as that term is defined in Title 18, United States Code, Section 2256(5), which said visual depictions involved the use of minors engaging in sexually explicit conduct, as that term is defined in Title 18, United States Code, Sections 2256(2)(A)-(B), and said visual depictions were of such sexually explicit conduct and had been transported in interstate commerce by computer.
The charges arose from an investigation by the Federal Bureau of Investigation.
United States Attorney Brian J. Kuester said, “Berryhill’s sentence not only brings him to justice, but should serve as a warning and deterrent to others who might consider possessing child pornography. The FBI and the United States Attorney’s Office are committed to investigating and prosecuting those that exploit children, including those that possess, share, or view child pornography. I commend the FBI agents for their thorough and professional investigation, and the members of this office who worked diligently to prosecute Berryhill.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Edward Snow represented the United States.
Louisiana Man Charged in $3 Million Kickback Scheme InvolvingRead the Press Release
DALLAS — Slater Washburn Swartwood, Sr., of Louisiana, has been charged with money laundering for his role in a fraud scheme that involved $3 million in illegal bribe and kickback payments, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
The criminal felony Information filed yesterday charges Swartwood with one count of conspiracy to commit money laundering. Signed plea papers were also filed indicating Swartwood’s intent to plead guilty. Swartwood faces a maximum penalty of imprisonment not to exceed five years and a $250,000 fine. Restitution could also be ordered. An arraignment date has not yet been set.
According to the filed Information and plea papers, Swartwood started working with Person A as a real estate adviser in approximately 1985. In approximately 2010, he began doing real estate consulting for Company A, at first as an employee and later as a consultant. Company A, which was owned and controlled by Person A, sold cameras and related services for school buses. Company A entered into various contracts and a licensing agreement with a Texas state agency acting through its superintendent, Person B. Under these contracts and the licensing agreement, the state agency purchased millions of dollars of camera equipment from Company A.
Between 2011 and 2016, according to documents filed in the case, Person A provided Swartwood with approximately $2 million to funnel to Person B through Swartwood’s companies, Elf Investments, Cambridge Realty Group, LLC, and Anrock Realty Services, LLC, in return for further agreements and camera-equipment orders.
The investigation was conducted by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Andrew Wirmani and Joseph Magliolo are in charge of the prosecution.
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Long-Time Bonanno Crime Family Member Sentenced to 96 Months’ Imprisonment for ArsonRead the Press Release
Earlier today, in federal court in Brooklyn, long-time Bonanno crime family member Vincent Asaro was sentenced by United States District Judge Allyne R. Ross to 96 months’ imprisonment for violating the Travel Act by using a telephone to order that a vehicle be burned. Asaro previously pled guilty to this crime on June 27, 2017. In sentencing Asaro, Judge Ross found that Asaro was a long-time member of the Bonanno organized crime family who had participated in, among other crimes, the 1969 murder of Paul Katz, the 1978 robbery of the Lufthansa Airlines Terminal at John F. Kennedy Airport, and that as of 2013, Asaro was actively involved in loansharking. Asaro was also ordered to pay $21,276 in restitution for the damages to the car burned in the arson.
Bridget M. Rohde, Acting 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), and James P. O’Neill, Commissioner, New York City Police Department, announced the sentence.
“Today’s sentence holds Asaro accountable not only for using his power as a member of organized crime to address a perceived slight by another motorist, but for a lifetime of violent criminal activity,” stated Acting United States Attorney Rohde. “This Office, together with our partners at the FBI, will continue to investigate and prosecute members and associates of organized crime and eliminate the danger they pose to members of our community.”
“An unfortunate chance encounter led an unsuspecting motorist to become embroiled in a high-speed chase at the hands of an enraged Asaro,” stated FBI Assistant Director-in-Charge Sweeney. “Unsatisfied with the outcome of his pursuit, Asaro dug his heels in. He contacted an associate with access to a local law enforcement database, identified the license plate information of the car, and put in motion a plan to set fire to the vehicle in front of the victim’s residence. Once the arson had occurred, at the hands of those directed to do so, Asaro insisted on checking in person to ensure his orders had been followed. The anger that propelled Asaro to action is reminiscent of so many scripted Hollywood dramas, but unlike the fame and fortune of the big screen, Asaro’s story ends on a different note. Today’s sentence proves that living life in the fast lane is sure to be short lived.”
As described in court filings and statements made during court appearances, Asaro was inducted into the Bonanno family more than 40 years ago and has previously held the position of captain and member of the family’s ruling panel. In early April 2012, Asaro was traveling in a car in Howard Beach when he became enraged at another motorist who had switched lanes in front of Asaro at a traffic light. Asaro chased the other car at a high rate of speed. The victim drove into Ozone Park while trying to call the police and describe where he was. When the victim arrived in an area he knew to contain a red light camera, he intentionally circled the block trying to set off the cameras in an attempt to alert the police to his location.
Shortly thereafter, Asaro contacted an associate of the Gambino organized crime family of La Cosa Nostra who Asaro knew to have access to local law enforcement databases. The next day, a local law enforcement database accessed the license plate information for the plate of the car the victim was driving, which revealed the victim’s address. Asaro then directed an associate of the Bonanno organized crime family (“Associate-1”) to set fire to the victim’s car. Associate-1 then recruited Matthew Rullan and John J. Gotti, Asaro’s co-defendants, to help him carry out the arson.
Associate-1, Gotti and Rullan drove in Gotti’s Jaguar sedan to a service station in the pre-dawn hours of April 4, 2012 where they filled a container with gasoline and proceeded to the residence of the victim. Associate-1 doused the vehicle with gasoline, and Rullan ignited it. An NYPD police officer in an unmarked car observed the crime in progress and pursued the Jaguar on a high-speed chase through the streets of Queens until he terminated the pursuit for safety reasons due to Gotti’s reckless driving. The following day, Associate-1 told Asaro about the arson, and Asaro drove to the auto body shop where the burned car had been towed to confirm that his order had been carried out.
In imposing the sentence, Judge Ross concluded that Asaro’s history and characteristics, specifically his longtime association with organized crime and his history of participating in crimes of violence, including the 1969 murder of Paul Katz and the 1978 armed robbery of over $6 million dollars in United States currency and jewelry from the Lufthansa Airlines Terminal, weighed in favor of a significant custodial sentence. Additionally, Judge Ross found that the nature and circumstances of the charged crime indicated that the defendant remains a danger to the community.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nicole M. Argentieri, Lindsay K. Gerdes, and Keith D. Edelman are in charge of the prosecution.
The Defendant:
VINCENT ASARO
Age: 82
Queens, NY
E.D.N.Y. Docket No. 17-CR-127 (ARR)
Lima men sentenced to life in prison and 30 years in prison for sex trafficking conspiracy involving teen girlsRead the Press Release
A Lima man was sentenced to life in prison and another was sentenced to 30 years in prison for their role in a conspiracy in which girls, then 14 and 16 years old, were forced into commercial sex acts, said U.S. Attorney Justin E. Herdman, FBI Special Agent in Charge Stephen D. Anthony and Lima Police Chief Kevin Martin.
U.S. District Judge Jack Zouhary sentenced Lorenzo Young to life in prison and Aundre Davis to 30 years in prison. Davis and Lorenzo Young were convicted by a jury earlier this year on charges including conspiracy to engage in sex trafficking of minors, sex trafficking of a minor and other crimes.
Megan Hitt, Randy Thompson and three other people previously pleaded guilty to crimes related to the conspiracy and have been sentenced to prison.
Young, Davis, Thompson and Hitt conspired to cause girls, aged 14 and 16, to engage in commercial sex acts in Lima and Fort Wayne, Indiana. They did this by taking and posting sexually explicit photos of the girls on backpage.com, transporting the girls, renting motel rooms for them and negotiating prices. This took place between November 2015 and January 2016, according to court documents and trial testimony.
“These defendants preyed on teen girls so they could line their pockets with money,” Herdman said.
“These individuals violated the rights of some of our most vulnerable in our community - the children,” Anthony said. “The FBI will continue working with our law enforcement partners to aggressively pursue justice for human trafficking victims and to put their perpetrators behind bars."
“Human trafficking is a devastating crime that must be stopped. It victimizes people within every segment of society throughout our nation,” Martin said. “I want to thank the FBI and U.S. Attorney’s Office for their help in enforcing the law against those who will engage in human trafficking within the Lima community. We are grateful for the cooperative working relationship we have with them and the many other local, state and federal law enforcement agencies that are working together to make human trafficking a thing of the past. The Lima Police Department cannot accomplish this alone.”
This case was investigated by the Federal Bureau of Investigation’s Toledo office and the Lima Police Department. It is being prosecuted by Assistant U.S. Attorney Alissa M. Sterling.
Las Vegas Man Sentenced to 10 Years in Prison for Bank RobberyRead the Press Release
LAS VEGAS, Nev. - A Las Vegas, Nevada man was sentenced today to 120 months in prison for robbing a bank located inside a grocery store, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
Anthony Donnell Tyner, 40, previously pleaded guilty to one count of bank robbery. In addition to the prison term, U.S. District Judge Andrew P. Gordon sentenced Tyner to three years of supervised release to follow his term of imprisonment. Tyner is a former felon with previous bank robbery convictions.
According to the criminal complaint, on Nov. 18, 2016, Tyner, who wore a fake gray beard, entered the U.S. Bank located inside the Albertson’s at 10140 West Flamingo Rd. He handed the bank teller a demand note and threatened to shoot the teller. Tyner stole $493 from the bank.
The case was investigated by the Federal Bureau of Investigation and the Las Vegas Metropolitan Police Department. Assistant U.S. Attorney Phillip N. Smith Jr. prosecuted the case.
This case was brought as part of Project Safe Neighborhoods, a nationwide commitment by the Department of Justice to reduce gun and gang crime in America by networking local programs that target gun and gun crime and providing these programs with additional tools necessary to be successful. For more information about Project Safe Neighborhoods, visit www.justice.gov/usao_nv.
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Lake Railway Pays $1.08 Million in Settlement for Modoc Forest FiresRead the Press Release
SACRAMENTO, Calif. — LRY, LLC d/b/a Lake Railway has paid $1.08 million to settle allegations by the United States relating to a pair of wildfires that burned 840 acres of national forest land, U.S. Attorney Phillip A. Talbert announced today.
The settlement represents a 100 percent recovery of the United States’ suppression costs, plus interest and penalties.
The “Gulch Fire” ignited in Modoc National Forest on July 3, 2014. The fire began along railroad tracks near Howard’s Gulch and swept outward — scorching 791 acres of national forest land. The “Howard’s Fire” ignited along neighboring tracks on May 1, 2014; it burned an additional 49 acres. Investigators attributed both fires to sparks from an improperly maintained engine.
“At a time when the Forest Service is spending more than half of its budget to suppress fires, being able to recover costs is crucial to our ability to restore these burned landscapes to a healthy and resilient condition,” said U.S. Forest Service Pacific Southwest Regional Forester Randy Moore.
Lake Railway is a rail line that operates in Northern California. Today’s settlement does not constitute an admission of liability by the company.
This case was the product of an investigation by the U.S. Forest Service. Assistant U.S. Attorney Benjamin J. Wolinsky pursued the case.
Jefferson City Man Charged with Illegal Firearms after Officers Confiscated 50 WeaponsRead the Press Release
JEFFERSON CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man who tried to sell firearms to a local pawn shop was charged in federal court today with illegally possessing firearms after law enforcement officers confiscated 50 weapons from him, including several stolen guns.
Jeremy L. Roark, 32, of Jefferson City, was charged with being a felon in possession of firearms in a complaint filed in the U.S. District Court in Jefferson City, Mo.
Today’s federal criminal complaint alleges that Roark was in possession of a Colt .45-caliber revolver on Dec. 15, 2017.
According to an affidavit filed in support of the complaint, Roark attempted to sell six firearms to River City Pawn and Gun in Jefferson City on Dec. 15, 2017. The owner told police officers that Roark brought six firearms to the business: a Colt .45-caliber revolver, a Taurus .38-caliber revolver, a Sig Sauer .45-caliber pistol, a Ruger .22-caliber revolver, a Ruger .357-caliber magnum revolver and a Ruger .45-caliber revolver. Roark also allegedly discussed having as many as 70 additional firearms for sale that he could bring to River City Pawn and Gun. The owner didn’t pay Roark for the six guns that were left, and after having no contact with Roark, called the police on Tuesday, Dec. 26, 2017.
The next day, investigators interviewed Roark, who acknowledged that he had taken the guns to River City Pawn and Gun. Roark also admitted that he had been a weekly user of methamphetamine for approximately two years.
According to court documents, law enforcement officers recovered approximately 50 firearms from Roark during the course of the investigation. At this time, the investigation has determined that four of those firearms were stolen.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Roark has prior felony convictions for distributing or manufacturing a controlled substance and a prior felony conviction for driving under the influence of alcohol. Roark also has been charged with first degree assault and is on bond in that case.
Larson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt.This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Jefferson City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Florida Resident Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
A Lauderhill, Florida, resident was sentenced to 48 months in prison for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and Acting United States Attorney Benjamin G. Greenberg of the Southern District of Florida.
According to documents and information provided to the court, from approximately 2008 through January 2015, in Broward and Miami-Dade Counties, Evens Julien, 53, and others, used stolen IDs, including the personal identifying information of prisoners and deceased individuals, to file over 2,000 tax returns with the Internal Revenue Service (IRS). These fraudulent returns sought more than $2 million in refunds. Julien and his co-conspirators recruited others to obtain Electronic Filing Identification Numbers from the IRS in their names and used the EFINs to file the fraudulent returns. They directed the refunds to debit cards and treasury checks and had them mailed to South Florida addresses. They then cashed the fraudulently obtained refund checks at check cashing stores and used Western Union and ATMs to withdraw the funds.
Julien pleaded guilty in October to conspiring to defraud the IRS, commit wire fraud, and commit aggravated identity theft and aggravated identity theft. In addition to the term of prison imposed, U.S. District Judge Federico A. Moreno ordered Julien to serve four years of supervised release and to pay $1,169,000 in restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and Acting U.S. Attorney Greenberg commended special agents of Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil of the Southern District of Florida and Assistant Chief Greg Tortella of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Federal Jury Finds Edina Chiropractor and His Patient Recruiters Guilty of Insurance Fraud ConspiracyRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the conviction of ADAM JOHN BURKE, 33, ABDIRAHIN KHALIF IBRAHIM, 26, and DANA ENOCH KIDD, 36, for their roles in a multi-million dollar insurance fraud conspiracy. BURKE, IBRAHIM, and KIDD were initially indicted on December 20, 2016, and following a two-week trial before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn., the jury convicted BURKE, IBRAHIM, and KIDD on charges of conspiracy and mail fraud.
Assistant U.S. Attorney David Maria said, “Adam Burke, a licensed Doctor of Chiropractic, used his professional position and private medical practice to perpetrate an egregious fraud scheme that cost automobile insurers and, ultimately, policyholders in Minnesota, millions of dollars. We are thankful for the hard work and dedication put into this case by our partners at the Commerce Fraud Bureau and the FBI.”
“Insurance fraud costs all Minnesotans in the form of higher premiums,” said Commerce Commissioner Jessica Looman. “The Commerce Fraud Bureau investigates sophisticated fraud schemes and works closely with our other law enforcement partners to bring criminals perpetrating fraud to justice. Today’s verdict makes it clear that Minnesota does not tolerate insurance fraud.”
“The defendants in this case defrauded automobile insurance companies by submitting false no-fault insurance claims and subsequently received reimbursements for chiropractic services that were either not medically necessary or were never rendered. Their greed had real consequences for the people of Minnesota in terms of higher insurance costs and tax dollars spent investigating their illegal conduct,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “The FBI and its partners will continue to aggressively pursue insurance fraud schemes to protect the public from dishonest fraudsters damaging our insurance companies, regardless of their position in the medical community.”
As proven at trial, beginning in at least 2012, BURKE, a licensed Doctor of Chiropractic, participated in a scheme to defraud automobile insurance companies by hiring patient recruiters, known as “runners,” to solicit automobile accident victims to attend treatments at BURKE’S clinic, Burke Chiropractic Center, P.A. (“Burke Chiropractic”). BURKE typically paid the runners, including IBRAHIM and KIDD, between $1,000 and $2,000 for each patient they brought to Burke Chiropractic so that BURKE could bill services to the insurance companies. To disguise the payments, BURKE would write checks to the runners with false descriptions in the memo lines such as “marketing,” “consulting fee,” or “pt transportation.” BURKE also required the runners to form corporate entities, such as limited liability companies, with names that sounded like legitimate businesses that performed marketing or transportation services, again, to hide the true nature of the payments. BURKE wrote more than 280 checks, totaling more than $590,000.
As proven at trial, BURKE structured the scheme in a way that would maximize Burke Chiropractic’s billings to the insurance companies. BURKE typically withheld kickback payments to the runners until after the patients had attended a certain number of treatment sessions. Frequently, the runners paid a portion of the kickback payments they had received from BURKE to the patients they referred in order to make sure that the patients attended the minimum number of treatment sessions. Thus, the kickback payments were intended to ensure that patients came for treatments at Burke Chiropractic because of the payments, as opposed to the necessity and reasonableness of the treatments. As an additional incentive to continue attending treatments, BURKE often referred patients to personal injury attorneys, and BURKE instructed the runners to advise patients that following through on all treatment sessions would result in a bigger settlement from the insurance company. As a result of this fraud scheme, BURKE and Burke Chiropractic billed millions of dollars to the automobile insurance companies.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Federal Bureau of Investigation. Additional assistance was provided by the Minneapolis Police Department, Saint Paul Police Department, Minnesota State Patrol, and Homeland Security Investigations.
This case is being prosecuted by Assistant U.S. Attorneys David M. Maria and John E. Kokkinen.
Defendant Information:
ADAM JOHN BURKE, 33
Minneapolis, Minn.
Convicted:
- Conspiracy to commit mail fraud, 1 count
- Mail fraud, 12 counts
ABDIRAHIN KHALIF IBRAHIM, 26
Saint Paul, Minn.
Convicted:
- Conspiracy to commit mail fraud, 1 count
- Mail fraud, 3 counts
DANA ENOCH KIDD, 36
Elk River, Minn.
Convicted:
- Conspiracy to commit mail fraud, 1 count
- Mail fraud, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Dunbar man pleads guilty to federal drug chargeRead the Press Release
CHARLESTON, W.Va. – A Dunbar man pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Rock Hudson Williams, also known as “Rocky,” 60, entered his guilty plea to aiding and abetting the distribution of crack.
Williams admitted that on July 24, 2015, he sold crack to a confidential informant working with the Metropolitan Drug Enforcement Network Team. The drug deal took place in the Dollar General parking lot in Cross Lanes.
Williams faces up to 20 years in federal prison when he is sentenced on March 29, 2018.
The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney John J. Frail is responsible for the prosecution. The plea hearing was held before Chief United States District Judge Thomas E. Johnston.
This case is being 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 crack.
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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CLT Logging Inc. Pays $1.95 Million in Settlement for Six Rivers and Klamath National Forest FiresRead the Press Release
SACRAMENTO, Calif. — CLT Logging, Inc. has paid $1.95 million to settle allegations by the United States relating to a wildfire that scorched 318 acres of national forest land, U.S. Attorney Phillip A. Talbert announced today.
The “Dillon Fire” started in Siskiyou County on August 3, 2012. Investigators determined the cause to be a trailer carrying improperly secured logging equipment, which dragged against California Highway 96, throwing sparks that ignited dry grass in 21 separate locations. The fire burned 182 acres in Six Rivers National Forest and 136 acres in Klamath National Forest.
“As wildfires continue to sweep across California, my office stands committed to protecting our national forests and holding accountable those who endanger them,” U.S. Attorney Talbert said.
“For the first time in its 112-year history, the U.S. Forest Service is spending more than 50 percent of its budget to suppress the nation’s wildfires,” said U.S. Forest Service Pacific Southwest Regional Forester Randy Moore. “Recoveries like this one help to restore these severely burned landscapes to a healthy and resilient condition.”
CLT Logging, Inc. is a timber company that conducts operations throughout Northern California. Additional parties to the settlement include Chuck L. Transportation, LLC and Barry Scott Peters. Today’s settlement does not constitute an admission of liability by the parties.
This case was the product of an investigation by the U.S. Forest Service. Assistant U.S. Attorney Benjamin J. Wolinsky pursued the case.
Air Force Reservist Sentenced to 72 Months in Prison for RapeRead the Press Release
DAYTON – Kyle Jordan, 31, of Franklin, Ohio was sentenced in U.S. District Court to 72 months in prison for one count of sexual abuse.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Lt. Col. Randal Pendleton, Commander, Air Force Office of Special Investigations 10th Field Investigations Squandron, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigations (FBI), announced the sentence handed down by U.S. District Judge Walter H. Rice.
According to the signed Statement of Facts attached to the plea agreement, in December 2015, Jordan sexually assaulted an unconscious woman while staying at a Temporary Lodging Facility located on Wright-Patterson Air Force Base.
Jordan raped the victim in a bedroom after they both consumed alcohol.
Jordan pleaded guilty to the sexual abuse count in January.
U.S. Attorney Glassman commended the investigation of this case by the Air Force OSI and FBI, as well as Assistant United States Attorneys Andrew J. Hunt, and Amy M. Smith, who are representing the United States in this case.
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27 December 2017
Wheeling man sentenced for cocaine distributionRead the Press Release
WHEELING, WEST VIRGINIA – Michael E. Stradwick, of Wheeling, West Virginia, was sentenced today to 84 months incarceration for distributing cocaine, United States Attorney Bill Powell announced.
Stradwick, age 38, pled guilty to one count of “Possession with Intent to Distribute Cocaine Base” in October 2017. The crime occurred in January 2017 in Wheeling, Ohio County.
Assistant U.S. Attorney Randolph J. Bernard and Special Assistant U.S. Attorney P. Anthony Martin prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the West Virginia State Police investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Watsonville Man Charged with Production, Distribution, Receipt, and Possession of Child PornographyRead the Press Release
SAN FRANCISCO – Anthony Vega-Lobato appeared in court on Friday, December 22, on charges he produced, distributed, received, and possessed child pornography, announced United States Attorney Brian J. Stretch and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin. The appearance follows an indictment handed down by a federal grand jury yesterday.
According to the indictment, Vega-Lobato, 22, from Watsonville, has been involved in the production of child pornography since at least April 14, 2016. The indictment alleges Vega-Lobato produced four video files containing visual depictions of three minors engaged in sexually explicit conduct. The indictment also alleges that in April of 2017, Vega-Lobato distributed child pornography in interstate and foreign commerce. Further, Vega-Lobato is charged with receiving child pornography at dates unknown until May 18, 2017, and with possessing child pornography until the same date.
In sum, Vega-Lobato is charged in the indictment with four counts of production of child pornography, in violation of 18 U.S.C. § 2251(a); one count of distribution of child pornography, in violation of 18 U.S.C. § 2251(a)(2); one count of receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2); and one count of possession and access with intent to view child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B).
Vega-Lobato was arrested on Thursday, December 21, and made his initial appearance in federal court on Friday before the Honorable Joseph C. Spero, U.S. Magistrate Judge. He was remanded into the custody of the U.S. Marshal and remains in custody. The defendant’s next scheduled appearance is at 9:30 a.m. on December 29, 2017, before the Honorable Elizabeth D. Laporte, U.S. Magistrate Judge, for arraignment and identification of counsel.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of violating 18 U.S.C. § 2251, the defendant faces, per count, a mandatory minimum prison sentence of 15 years, a maximum sentence of 30 years, and a fine of $250,000 plus restitution, if appropriate. If convicted of violating 18 U.S.C. § 2252(a)(2), the defendant faces, per count, a mandatory minimum prison sentence of 5 years, a maximum sentence of 20 years, and a fine of $250,000 plus restitution, if appropriate. If convicted of violating 18 U.S.C. § 2252(a)(4), the defendant faces a maximum sentence of 20 years, a fine of $250,000, plus restitution, if appropriate. Additional fines and a term of supervised release also may be imposed, however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Scott Simeon is prosecuting the case with the assistance of Ryka Barghi. The prosecution is the result of an ongoing investigation by the United States Department of Homeland Security.
If members of the public have any information relevant to this investigation or to suspected child predators or suspicious activity, HSI encourages them to contact HSI through the toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form at https://www.ice.gov/webform/hsi-tip-form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
Two Fort Worth Men Who Broke into Pharmacies and Stole Controlled Substances SentencedRead the Press Release
FORT WORTH, Texas — Two men who admitted breaking into pharmacies and stealing controlled substances, Nicholas Evans, aka “Nico,” and Darrien Jefferson, aka “Smoke,” were sentenced today by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Evans, 25, was sentenced to serve a total of 121 months in federal prison, and Jefferson, 36, was sentenced to a total of 168 months in federal prison. Each pleaded guilty in August 2017 to one count of conspiracy to commit 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.
Kenneth Sauls, aka “Smurf,” 23, also pleaded guilty to his role in the robbery and is scheduled to be sentenced on January 16, 2018.
Dion Clark, 36, was charged in a separate indictment and pleaded guilty to his role in the robbery. Clark is scheduled to be sentenced before U.S. District Judge John McBryde on February 14, 2018.
According to the factual resumes filed in the case, on April 9, 2016, Evans, Jefferson, Sauls, and Clark entered into an agreement to commit a robbery at the Walgreens Pharmacy located at 833 South Wilshire Blvd., Burleson, Texas. Clark waited in the vehicle as the get-a-way driver while Evans, Jefferson and Sauls entered the Walgreens, brandished firearms and “zip” tied the victims’ hands and feet. Collectively the group stole narcotics, cash, cigarettes, and approximately 150 booklets of stamps.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Fahey prosecuted.
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Tucson Man Charged with Alien Smuggling, High Speed Flight, Assaults on Federal Officers, and Firearm OffensesRead the Press Release
TUCSON, Ariz. – Roberto Ramirez, 21, of Tucson, Ariz., was arrested on Dec. 24, 2017 and subsequently charged by complaint with multiple offenses, including transportation of illegal aliens resulting in serious bodily injury, high-speed flight from a border patrol checkpoint, assault on a federal officer, and use of a firearm in furtherance of a violent crime.
The complaint alleges that Ramirez arrived at the Border Patrol checkpoint on I-19 near Amado while transporting two suspected illegal aliens. When agents referred Ramirez for further inspection, Ramirez fled from the checkpoint and drove northbound on I-19 at a high rate of speed. Several border patrol agents pursued Ramirez in their vehicles. During the pursuit, Ramirez fired several gunshots at the agents and attempted to ram their vehicles. Ramirez eventually lost control of his vehicle and crashed. One of Ramirez’s passengers was ejected during the crash and suffered serious injuries.
At the initial appearance/detention hearing held today, the court ordered that Ramirez remain detained in custody.
Several of the charges carry a maximum penalty of 20 years of imprisonment and a $250,000 fine.
A criminal complaint is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The investigation in this case was conducted by Homeland Security Investigations and the United States Border Patrol. The prosecution is being handled by Liza M. Granoff and Matthew C. Cassell, Assistant United States Attorneys, District of Arizona, Tucson.
CASE NUMBER: Mag#-17-MJ-06045M
RELEASE NUMBER: 2017-126_Ramirez
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Three-Time Convicted Felon from the Interior Sentenced for Illegally Possessing Firearms in FairbanksRead the Press Release
Fairbanks, Alaska – U.S. Attorney Bryan Schroder announced today that a three-time convicted felon was sentenced to 37 months in federal prison for illegally possessing firearms in Fairbanks, Alaska.
J Cobb Whitmore, 38, of Fairbanks and Nenana, Alaska, was sentenced yesterday by Senior U.S. District Judge Ralph R. Beistline, to 37 months, 3 years supervised release, and 80 hours of community service. On September 8, 2017, Whitmore pled guilty in federal court for being a felon in possession of firearms, and agreed to forfeit all rights to firearms and ammunition named in the forfeiture allegation.
According to Assistant U.S. Attorney Andrea Hattan, who prosecuted the case, in November 2015, Whitmore was a fugitive wanted on two active felony warrants in the following State of Alaska cases: (1) 4FA-15-01243CR (Assault 3); and (2) 4FA-15-02203CR (Escape 2). On November 19, 2015, after several days of surveillance and investigation, the U.S. Marshal Service’s Alaska Fugitive Task Force (AFTF) apprehended Whitmore at a Fairbanks property and executed the two outstanding warrants stemming from Whitmore’s aforementioned 2015 cases. At the time of his arrest, Whitmore was found in possession of two firearms, ammunition, and a ballistic vest, as well as a flatbed truck stolen from a nearby Fairbanks property.
Whitmore’s lengthy criminal history includes numerous violent assaults, DUIs, and other serious crimes, spanning more than 20 years. All of Whitmore’s contacts with the criminal justice system have been in Alaska, and Whitmore has committed nearly all of his crimes in either Nenana or Fairbanks.
At sentencing, Judge Beistline noted that Whitmore has victimized numerous Interior residents over the years via Whitmore’s numerous convictions, many of which involved violence, guns, or both. The Judge imposed the high-end of the advisory sentencing guideline range for Whitmore (i.e., 37 months) and ordered, among other things, that Whitmore complete 80 hours of community service and meet satisfy his child support obligations.
U.S. Attorney Schroder commended the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the United States Marshal Service, both branches of the Department of Justice, and the Alaska State Troopers (AST) for their substantial assistance leading to the successful prosecution of this case.
Seven Men Indicted for Drug Trafficking and Firearms Offenses in Fox Valley RegionRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on December 19, 2017, a federal grand jury returned a nine-count indictment against seven individuals allegedly involved in drug trafficking in the Fox Valley area of Northeastern Wisconsin. The indictment named the following individuals:
Name
Age
Residence
Robert Losse
34
Menasha, Wisconsin
Lee Carter
38
Fox Lake, Wisconsin
Craig Hannemann
34
Appleton, Wisconsin
Joshua Murphy
38
Bruce, Wisconsin
Zachary Dittmer
23
Black River Falls, Wisconsin
Andrew Thede
30
Appleton, Wisconsin
Anthony Cabrera-Santiago
30
Milwaukee, Wisconsin
All seven are charged in Count One with Conspiracy to Distribute Greater Than 500 Grams of Methamphetamine in violation of Title 21 United States Code Section 846. Each defendant faces a sentence on this count of a minimum of 10 years, and up to life, in prison; up to a $10 Million fine; and between 5 years and a lifetime of supervised release. Losse, Carter, Thede and Cabrera-Santiago also face charges of Possession of a Firearm in Furtherance of a Drug Trafficking Crime in violation of Title 18 United States Code Section 924(c). This charge has a mandatory minimum consecutive sentence of 5 years, and up to life in prison; up to a $250,000 fine; and up to 5 years of supervised release. Additional drug charges were issued against Carter, Hannemann, Thede, and Cabrera-Santiago.
According to the indictment, the defendants conspired amongst themselves and with others to obtain and distribute methamphetamine in the Fox Valley area of Northeastern Wisconsin.
The case was investigated by the Lake Winnebago Area Metropolitan Enforcement Group – Drug Unit, United States Drug Enforcement Administration, Federal Bureau of Investigation, with assistance from the Winnebago County District Attorney’s Office, Outagamie County District Attorney’s Office, and Calumet County District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
# # # # #
For Additional Information Contact:
Public Information Officer Dean Puschnig 414-297-1700
New York Attorney Convicted of Securities Fraud and Wire Fraud ConspiraciesRead the Press Release
Evan Greebel, a former partner at the New York office of Katten Muchin Rosenman LLP who served as outside counsel to Retrophin Inc., a biopharmaceutical company, was convicted today by a federal jury in Brooklyn of two counts of a superseding indictment charging him with conspiracy to commit securities fraud and conspiracy to commit wire fraud. The verdict followed an 11-week trial before United States District Judge Kiyo A. Matsumoto.
Bridget M. Rohde, Acting 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 verdict.
“By helping Retrophin CEO Martin Shkreli steal millions of dollars and cover up Shkreli’s fraud, the defendant Evan Greebel betrayed the trust placed in him by Retrophin’s board of directors to represent the company’s best interests,” stated Acting United States Attorney Rohde. “Today’s verdict sends a powerful message that this Office, together with our law enforcement partners, will hold lawyers accountable when they use their legal expertise to facilitate the commission of crimes.” Ms. Rohde thanked the Securities and Exchange Commission, New York Regional Office (SEC), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their significant cooperation and assistance in this case.
“Greebel’s conviction highlights the deliberate actions he took in conspiring with hedge fund manager Martin Shkreli to defraud investors,” stated FBI Assistant Director-in-Charge Sweeney. “While it’s become increasingly more evident that Greebel exploited his knowledge of the law in his efforts to break the law, today we finally see justice served in a case that’s spent no shortage of its time in the spotlight. Investment fraud remains a priority for the FBI’s New York Office.”
The evidence at trial established that between 2011 and 2014, Greebel conspired with Shkreli and others in a scheme to misappropriate Retrophin’s assets in order to pay off defrauded investors in Shkreli’s hedge funds, MSMB Capital Management LP (MSMB Capital) and MSMB Healthcare Management LP (MSMB Healthcare). As part of this scheme, Greebel negotiated and prepared so-called “settlement” agreements with certain defrauded MSMB Capital and MSMB Healthcare investors, which caused Retrophin to reimburse those investors more than $2 million in cash and stock for their lost investments in Shkreli’s hedge funds even though Retrophin was not responsible for those losses. Greebel also arranged for certain other defrauded investors to enter into sham consulting agreements with Retrophin as a means to settle liabilities owed by Shkreli and the hedge funds.
In addition, between 2012 and 2014, Greebel and Shkreli engaged in a scheme to defraud investors and potential investors in Retrophin by attempting to illegally control the price and trading volume of Retrophin’s stock. Greebel and Shkreli executed this scheme by, among other things, concealing Shkreli’s beneficial ownership and control of the majority of Retrophin’s free-trading shares. Greebel and Shkreli recruited associates of Shkreli to be nominee shareholders for the majority of Retrophin’s free-trading shares, and they also filed a false document with government regulators to hide the fact that Shkreli controlled those shares. Greebel and Shkreli not only prevented nominee employees from selling these shares, but also directed that some of the shares be used to settle liabilities owed by the MSMB hedge funds and Shkreli.
When he is sentenced, Greebel faces a maximum of 20 years in prison on the top count of conviction.
In August 2017, co-defendant Shkreli was convicted of securities fraud and securities fraud conspiracy by a federal jury following a six-week trial before Judge Matsumoto. Shkreli is awaiting sentencing.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alixandra Smith, David Pitluck and David K. Kessler are in charge of the prosecution.
The Defendants:
EVAN GREEBEL
Age: 44
Scarsdale, New York
MARTIN SHKRELI
Age: 34
Manhattan, New York
E.D.N.Y. Docket No. 15-CR-637 (KAM)Indictment unsealed charging additional man for labor trafficking conspiracy that forced minors to work at egg farms near MarionRead the Press Release
A federal court today unsealed charges against a fourth defendant for participating in a labor-trafficking scheme that forced minors to work at egg farms in central Ohio. The defendant, Pablo Duran Ramirez, was apprehended Saturday by Border Patrol while attempting to cross the border between Mexico and the United States. Three other defendants have previously been convicted for participating in the scheme.
The charges were announced by Justin E. Herdman, U.S. Attorney for the Northern District of Ohio; Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division; and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division.
The indictment unsealed today alleges that Duran Ramirez contracted to provide labor for Trillium Farms while knowing or being in reckless disregard of the fact that some of the workers were being trafficked. In addition to the charges for forced labor and for conspiracy, Duran Ramirez is facing a charge of encouraging another person to illegally enter the United States. Duran Ramirez, 49, is a United States citizen.
Three other defendants have pleaded guilty to participating in the trafficking scheme. Those defendants admitted to recruiting workers from Guatemala, some as young as 14 or 15 years old, falsely promising them good jobs and a chance to attend school in the United States. The defendants then smuggled and transported the workers to a trailer park in Marion, Ohio, where they ordered them to live in dilapidated trailers and to work at physically demanding jobs at Trillium Farms for up to 12 hours a day. The work included cleaning chicken coops, loading and unloading crates of chickens, de-beaking chickens and vaccinating chickens. Eight minors and two adults were identified as victims of the scheme.
Aroldo Castillo-Serrano, the lead smuggler and primary enforcer, was sentenced to 188 months in prison. Ana Angelica Pedro-Juan, who oversaw the victims in Ohio, was sentenced to 120 months. Conrado Salgado-Soto, who arranged jobs for the victims, was sentenced to 51 months. The indictment unsealed today alleges that Salgado-Soto was a subcontractor hired by Duran Ramirez.
At sentencing of the other defendants, Senior United States District Judge James G. Carr found that they threatened workers with physical harm and withheld their paychecks in order to compel them to work.
Three additional defendants, including Duran Ramirez’s son, pleaded guilty to encouraging illegal entry into the United States in connection to the scheme.
The trafficking and conspiracy counts that Duran Ramirez is charged with carry sentences of up to 20 years. The count of encouraging the entry of illegal aliens carries a sentence of up to five years.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty. The investigation is ongoing.
This case is being investigated by the Federal Bureau of Investigation’s Cleveland Office, Mansfield Resident Agency; and the Department of Homeland Security. The case is being jointly prosecuted by Civil Rights Division Trial Attorney Dana Mulhauser and Assistant U.S. Attorney Chelsea Rice.
Fourth Defendant Charged in Ohio Trafficking Scheme Involving Immigrant MinorsRead the Press Release
A federal court today unsealed charges against a fourth defendant for participating in a labor-trafficking scheme that forced minors to work at egg farms in central Ohio. The defendant, Pablo Duran Ramirez, was apprehended Saturday by Border Patrol while attempting to cross the border between Mexico and the United States. Three other defendants have previously been convicted for participating in the scheme.
The charges were announced by Justin E. Herdman, U.S. Attorney for the Northern District of Ohio; Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division; and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division.
The indictment unsealed today alleges that Duran Ramirez contracted to provide labor for Trillium Farms while knowing or being in reckless disregard of the fact that some of the workers were being trafficked. In addition to the charges for forced labor and for conspiracy, Duran Ramirez is facing a charge of encouraging another person to illegally enter the United States. Duran Ramirez, 49, is a United States citizen.
Three other defendants have pleaded guilty to participating in the trafficking scheme. Those defendants admitted to recruiting workers from Guatemala, some as young as 14 or 15 years old, falsely promising them good jobs and a chance to attend school in the United States. The defendants then smuggled and transported the workers to a trailer park in Marion, Ohio, where they ordered them to live in dilapidated trailers and to work at physically demanding jobs at Trillium Farms for up to 12 hours a day. The work included cleaning chicken coops, loading and unloading crates of chickens, de-beaking chickens and vaccinating chickens. Eight minors and two adults were identified as victims of the scheme.
Aroldo Castillo-Serrano, the lead smuggler and primary enforcer, was sentenced to 188 months in prison. Ana Angelica Pedro-Juan, who oversaw the victims in Ohio, was sentenced to 120 months. Conrado Salgado-Soto, who arranged jobs for the victims, was sentenced to 51 months. The indictment unsealed today alleges that Salgado-Soto was a subcontractor hired by Duran Ramirez.
At sentencing of the other defendants, Senior United States District Judge James G. Carr found that they threatened workers with physical harm and withheld their paychecks in order to compel them to work.
Three additional defendants, including Duran Ramirez’s son, pleaded guilty to encouraging illegal entry into the United States in connection to the scheme.
The trafficking and conspiracy counts that Duran Ramirez is charged with carry sentences of up to 20 years. The count of encouraging the entry of illegal aliens carries a sentence of up to five years.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty. The investigation is ongoing.
This case is being investigated by the Federal Bureau of Investigation’s Cleveland Office, Mansfield Resident Agency; and the Department of Homeland Security. The case is being jointly prosecuted by Civil Rights Division Trial Attorney Dana Mulhauser and Assistant U.S. Attorney Chelsea Rice.
Florida Resident Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
A Lauderhill, Florida, resident was sentenced to 48 months in prison for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and Acting United States Attorney Benjamin G. Greenberg of the Southern District of Florida.
According to documents and information provided to the court, from approximately 2008 through January 2015, in Broward and Miami-Dade Counties, Evens Julien, 53, and others, used stolen IDs, including the personal identifying information of prisoners and deceased individuals, to file over 2,000 tax returns with the Internal Revenue Service (IRS). These fraudulent returns sought more than $2 million in refunds. Julien and his co-conspirators recruited others to obtain Electronic Filing Identification Numbers from the IRS in their names and used the EFINs to file the fraudulent returns. They directed the refunds to debit cards and treasury checks and had them mailed to South Florida addresses. They then cashed the fraudulently obtained refund checks at check cashing stores and used Western Union and ATMs to withdraw the funds.
Julien pleaded guilty in October to conspiring to defraud the IRS, commit wire fraud, and commit aggravated identity theft and aggravated identity theft. In addition to the term of prison imposed, U.S. District Judge Federico A. Moreno ordered Julien to serve four years of supervised release and to pay $1,169,000 in restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and Acting U.S. Attorney Greenberg commended special agents of Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil of the Southern District of Florida and Assistant Chief Greg Tortella of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Drug Trafficker Sentenced to Serve 188 Months in Federal Prison on Conspiracy ConvictionRead the Press Release
DALLAS — A defendant charged in a major drug distribution conspiracy that operated in the Dallas-Fort Worth metroplex and elsewhere was sentenced last week by U.S. District Judge Jane J. Boyle to 188 months in federal prison for his role in that conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Tony Ruvalcaba, a/k/a “Lil Tony,” 40, of Dallas, pleaded guilty in December 2015 to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance.
In July 2015, Ruvalcaba and 45 others were indicted, following a law enforcement operation. According to the plea agreement factual resume filed in Ruvalcaba’s case, beginning in November 2012, Ruvalcaba conspired with Javier Guerra, aka “Chop,” Eduardo Ruvalcaba, Jose Guerrero, aka “JD,” Eusebio Martinez Ramirez, Jr., aka “Sip,” Kenneth Johnson, aka “KJ,” Alex Gonzales, Noel Escamilla, and others to possess with intent to distribute 500 grams or more of methamphetamine. The defendants were supplied multi-kilogram amounts of methamphetamine which they then worked to distribute to various individuals.
The Federal Bureau of Investigation, Dallas Police Department, and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigrations and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.
Assistant U.S. Attorneys George Leal and John de la Garza were in charge of the prosecution.
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Convicted Felon Who Fled Mt. Brook Police Indicted on Federal Gun ChargeRead the Press Release
BIRMINGHAM – A federal grand jury today returned a federal gun charge against the Irondale man who last month crashed a stolen car in Mountain Brook after fleeing police there.
U.S. Attorney Jay E. Town, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven L. Gerido, Jefferson County District Attorney Mike Anderton and Mountain Brook Police Chief Ted Cook announced the indictment.
A one-count indictment filed in U.S. District Court charges ERIC DEVAUGHN McALPINE, 24, as a convicted felon in possession of firearms on Nov. 22 in Jefferson County. He possessed a Charter Arms .22-caliber revolver and a Stallard Arms 9mm pistol, according to the indictment. McAlpine previously was convicted of the felonies of first-degree robbery, second-degree assault and third-degree robbery in Jefferson County Circuit Court in December 2013, the indictment says.
“This is a great example of local, state and federal law enforcement working together to bring violent criminals to justice, especially those who illegally possess firearms,” said Town. “The partnerships forming between state and federal prosecutorial and investigative agencies is great news for every citizen of the Northern District, but will prove to be the bane of the worst offenders who have afflicted our neighborhoods for too long.”
“The partnerships fostered between ATF, the Mountain Brook Police Department and the District and U.S. Attorney’s offices have led to taking firearms off the streets from prohibited persons endangering the community,” Gerido said.
“This cooperative effort between local and federal agencies is truly a thing of beauty,” Anderton said. “This case, in particular, shows the dedication of prosecutors and law enforcement to take the most violent offenders and deal with them in a special way. My office looks forward to even better working relationships with agencies with which we normally do not interact. We are proud of these men and women.”
“Criminals have no regard for jurisdictional boundaries when committing crimes,” Cook said. “This case represents that, and how cooperation among the various law enforcement agencies works to take these violent criminals off the streets of our communities.”
Mountain Brook Police initially arrested McAlpine Nov. 22 on charges of first-degree receiving stolen property, certain persons forbidden to possess a pistol, unlawful possession of a controlled substance and attempting to elude.
Court documents indicate that Irondale Police identified McAlpine on a home security video on Nov. 20 after responding to a home burglary and car theft report. The vehicle stolen was a blue 2014 Hyundai Sonata.
On the afternoon of Nov. 22, a Mountain Brook Police officer attempted to stop a Sonata on Montclair Road after his radar clocked the car traveling 55 mph in a 25 mph zone, according to court documents. The Sonata sped away, exceeding 100 mph and recklessly weaving through traffic to avoid apprehension.
The car went off the road on the westbound side of Montclair Road, near Cresthill Road, and landed upside down in a wooded area. No one was in the vehicle when the officer pursuing it arrived at the crash, according to court documents. Another Mountain Brook police officer arrested McAlpine a short time later walking through a front yard on Cresthill Road.
Police recovered a loaded Charter Arms Pathfinder .22-caliber revolver and an unloaded Stallard Arms 9mm pistol in the Sonata, according to court documents.
The federal charge of being a convicted felon in possession of a firearm carries a maximum penalty of 10 years in prison.
ATF investigated the case in conjunction with Mountain Brook Police and the Jefferson County District Attorney’s Office. Assistant U.S. Attorney Mohammad Khatib is prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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26 December 2017
Kaleil Tuzman, Former Chairman and Ceo of Technology Start-Up Company Kit Digital, and Omar Amanat Found Guilty in Manhattan Federal Court of Securities Fraud Related OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that KALEIL ISAZA TUZMAN, the former chairman of the board of directors and chief executive officer of the technology start-up company KIT digital (“KITD”), and OMAR AMANAT, an associate of Tuzman’s, were found guilty this afternoon in Manhattan federal court of various securities fraud-related offenses, after a six-week trial presided over by U.S District Judge Paul G. Gardephe.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Today, after a six-week trial, a New York jury convicted Kaleil Tuzman and Omar Amanat of securities and accounting fraud. Kaleil Isaza Tuzman built the company named after himself, Kit Digital, on a foundation of lies, working with his co-defendant Omar Amanat to defraud investors out of millions of dollars through years of deceit. The evidence of their criminal schemes was so overwhelming that Amanat actually tried to fool the jury by introducing fake emails into the record as exculpatory ‘evidence’ in this trial. Unfortunately for Tuzman and Amanat, the jury saw through their tangled web of lies, convicting them on all counts. Today, Tuzman and Amanat’s lies finally caught up to them, and they now must face what they have been desperately seeking to evade for years – justice.”
According to the Indictment and other filings in Manhattan federal court and the evidence presented at trial:
The Scheme to Defraud Maiden Capital Investors
Stephen Maiden was the managing member of Maiden Capital, an unregistered investment advisory firm that managed portfolios of securities. Between in or about February 2009 and in or about June 2012, AMANAT, along with Maiden and others, devised and carried out a scheme to hide the fact that investments by Maiden Capital clients in Enable, an investment vehicle for which AMANAT raised money (based, in part, on false and misleading representations), had been lost. To facilitate the scheme, Maiden, with the knowledge and approval of AMANAT, generated fictitious client account statements that failed to disclose the Enable losses. In addition, AMANAT wired hundreds of thousands of dollars to a Maiden Capital bank account to support Maiden Capital, including to allow Maiden to repay investors whose redemption requests could not be forestalled and thus to continue to keep secret from Maiden Capital investors the Enable losses for over three years.
Evidence at trial also revealed that AMANAT produced to the Government and entered into evidence at trial email communications that had been fabricated. After two evidentiary hearings into the issue, the Court allowed the Government to present to the jury evidence of AMANAT’s use of false and fabricated email evidence during the trial.
After the verdict, Judge Gardephe revoked AMANAT’s bail and ordered him remanded into custody, citing numerous factors, including that “substantial evidence was introduced at trial that Mr. Amanat fabricated emails” showing “disdain for the court” and its procedures.
The Market Manipulation Scheme
Between in or about December 2008 and in or about September 2011, TUZMAN, Maiden, and AMANAT engaged in efforts to artificially inflate the share price and trading volume of KITD shares. During this time period, during which KITD shares traded on the OTC Bulletin Board and on the NASDAQ, Maiden, at TUZMAN’s and AMANAT’s behest, purchased and sold shares of KITD through Maiden Capital, at times for the purpose of manipulating the stock price and at times for the purpose of creating the illusion of greater volume in the trading for KITD shares.
For instance, Maiden, with TUZMAN’s knowledge and approval, frequently engaged in match trading in which Maiden caused an account under Maiden’s control to buy or sell KITD stock, and on the same day caused an account under Maiden’s control to take the opposite position. TUZMAN also directed Maiden to make timely purchases of KITD stock in an effort to manipulate the price of KITD shares at certain critical moments, including, for example, when KITD was seeking to raise additional capital and in the weeks before KITD’s stock began trading on the NASDAQ. At times, Maiden was responsible for nearly all of the day’s trading activity in KITD stock.
Over the course of the scheme, TUZMAN caused KITD to invest approximately $1,150,000 in company cash in Maiden Capital but failed to disclose to KITD shareholders that these investments with Maiden Capital were not part of an arms-length relationship. Instead, TUZMAN portrayed these investments as efforts to safely invest assets of KITD. In reality, TUZMAN caused KITD to make these investments in order to help fund Maiden’s purchases of KITD shares, as part of the effort to manipulate the market described above. And, on one occasion, TUZMAN caused KITD to invest $250,000 in Maiden Capital so that Maiden could reimburse TUZMAN for a prior, personal investment that TUZMAN made with Maiden Capital, thereby using KITD as his personal bank.
The Accounting Fraud Scheme
From at least in or about 2010 through in or about 2012, TUZMAN, along with Robin Smyth, KITD’s former CFO, Gaven Campion, KITD’s former president,[1] and others, engaged in an illegal scheme to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
TUZMAN, working with others, including Smyth and Campion, devised and executed a scheme to inflate KITD’s revenue falsely. This scheme involved two principal methods: (a) the improper recognition of revenue from so-called “perpetual license” contracts for KITD software (contracts that gave the purchasing customer the right to use the licensed software indefinitely), and (b) the execution of fraudulent “round-trip” transactions that had the effect of using KITD’s own cash, rather than payments received from customers, to pay off bills, known as accounts receivable, that were due and owed to KITD, including those resulting from KITD’s improper revenue recognition practices, rather than disclose to KITD’s auditors and the investing public the fact that the bills were uncollectible or, in some cases, had resulted from fabricated contracts. These fraudulent practices caused KITD to materially overstate its reported revenue, which had the effect of materially overstating KITD’s net income and earnings on its annual and quarterly financial reports issued from the fiscal quarter ending June 30, 2010, through the fiscal quarter ending March 31, 2012.
* * *
TUZMAN, 45, was found guilty of one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud with respect to the market manipulation scheme. For the accounting fraud scheme, TUZMAN was found guilty of one count of conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors. The Counts of which TUZMAN was convicted carry a combined maximum term of imprisonment of 30 years, which includes five years each on the conspiracies to commit securities fraud and 20 years on the conspiracy to commit wire fraud.
AMANAT, 44, was found guilty of one count of conspiracy to commit wire fraud, one count of wire fraud, one count of aiding and abetting investment advisor fraud, and one count of conspiracy to commit securities fraud, all in relation to the market manipulation scheme. The Counts of which AMANAT was convicted carry a combined maximum term of imprisonment of 50 years, which includes five years each on the conspiracies to commit securities fraud and aiding and abetting investment advisor fraud and 20 years each on the conspiracy to commit wire fraud and wire fraud counts.
The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Court.
AMANAT is scheduled to be sentenced by Judge Gardephe on April 25, 2018, at 12:30 p.m. TUZMAN is scheduled to be sentenced by Judge Gardephe on April 26, 2018, at 12:30 p.m.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service. He also thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams, Andrea M. Griswold, and Joshua A. Naftalis are in charge of the prosecution.
[1] Maiden, Smyth, and Campion have pled guilty to various offenses for their roles in the schemes and cooperated with the Government.
KC Man Charged with Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was charged in federal court today for illegally possessing firearms.
Robert J. Gross, 66, of Kansas City, was charged in a criminal complaint filed in the U.S. District Court in Kansas City, Mo.
Today’s criminal complaint charges Gross with being a felon in possession of firearms. Gross allegedly was in possession of a Springfield 12-gauge shotgun and a Winchester 12-gauge shotgun on Friday, Dec. 22, 2017.
According to an affidavit filed in support of the federal criminal complaint, Gross has been destroying property and stalking individuals associated with massage parlors in Kansas, which led to him being placed under surveillance by law enforcement.
On Dec. 2, 2017, officers saw Gross purchase four sets of handcuffs, two black shirts with “SECURITY” written on them with badges on the front, and two balaclavas (a garment used to conceal facial identity) from a surplus store in Kansas City, Kan. The manager of the business told investigators that Gross had purchased two sets of handcuffs two weeks earlier.
On Dec. 16, 2017, officers saw Gross inquiring about the purchase of firearms at the Kansas City Gun Show located at the KCI Expo Center. Gross picked up and handled a 9mm Velocity Uzi-type firearm at one of the booths. The dealer at the booth told investigators that Gross, who approached his booth multiple times throughout the day, had asked about purchasing up to three firearms. The next day, the affidavit says, Gross visited the gun show again and was seen inquiring about the purchase of firearms. Gross visited a different booth, where he picked up a 9mm Luger handgun and asked about buying it.
On Dec. 22, 2017, Gross returned to the surplus store in Kansas City, Kan., and was observed purchasing four more sets of handcuffs and a balaclava. Gross also asked about purchasing a bulletproof vest.
On Dec. 22, 2017, officers observed Gross allegedly purchase two shotguns from an unidentified individual in the parking lot of the Lowe’s Home Improvement store in Liberty, Mo. According to the affidavit, Gross first drove to the Pizza Ranch parking lot, where he removed the license plate from the front of his car. The rear license plate had been removed as well. Then Gross drove to the nearby Lowe’s store, where he was met by an individual driving a white pickup truck. The unidentified individual allegedly sold Gross two shotguns, which he handed to Gross from his truck. As Gross was putting two shotguns in the trunk of his car, officers arrested him for being a felon in possession of firearms.
According to the affidavit, the individual who sold the shotguns to Gross told investigators that Gross called him the day before, after seeing the firearms advertised on a web site. Gross told him he wanted to buy two shotguns for $350 and they arranged to meet at Lowe’s to conduct the sale.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Gross has prior felony convictions for possession with intent to distribute cocaine and making terroristic threats to a former girlfriend.
Larson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt.This case is being prosecuted by Assistant U.S. Attorney Jeffrey Valenti. It was investigated by the FBI, the Independence, Mo., Police Department, the Kansas City, Mo., Police Department, the Lawrence, Kan., Police Department, and the Douglas County, Mo., Sheriff’s Department.
High-Ranking Soccer Officials Convicted in Multi-Million Dollar Bribery SchemesRead the Press Release
On Friday, former high-ranking soccer officials Juan Ángel Napout and José Maria Marin were convicted of racketeering conspiracy and related crimes by a federal jury in Brooklyn. The crimes of conviction related to the defendants’ participation in schemes to accept millions of dollars in bribes in exchange for the media and marketing rights to various soccer tournaments. In addition to racketeering conspiracy, Napout was also convicted of two counts of wire fraud conspiracy, and Marin was convicted of three counts of wire fraud conspiracy and two counts of money laundering conspiracy. Today, the jury found the defendant Manuel Burga, former president of the Peruvian soccer federation, not guilty of racketeering conspiracy, the one count on which he was extradited from Peru.[1] After the jury rendered its verdict, which followed a six-week trial before United States District Judge Pamela K. Chen, Judge Chen remanded Napout and Marin into custody.
At the time of his arrest in December 2015, Napout was the president of the South American soccer confederation, known as CONMEBOL, a member of the FIFA Executive Committee, and a FIFA Vice President. He had also previously served as president of the Paraguayan soccer federation. At the time of his arrest in May 2015, Marin was the former head of the Brazilian soccer federation, known as the CBF, and a member of various FIFA standing committees. As proved at trial, the defendants and their co-conspirators accepted or agreed to accept tens of millions of dollars in bribe payments over the course of the conspiracy.
The guilty verdicts were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and R. Damon Rowe, Special-Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS).
“As the jury found, defendants Napout and Marin lined their own pockets with millions of dollars in bribes at the expense of the soccer organizations they represented and the people those organizations served,” said Acting United States Attorney Rohde. “Now these defendants have been brought to justice, like the others who have been convicted for corrupting a sport beloved across the world, and will face punishment for their criminal conduct. The guilty verdicts and the evidence at trial highlight the extent of the corruption and the continuing need for reform.” Ms. Rohde expressed her grateful appreciation to governments around the world, particularly the governments of Switzerland, Brazil, Peru, and Paraguay for their significant assistance in this case. Ms. Rohde also thanked the Office of International Affairs and the Organized Crime and Gang Section of the U.S. Department of Justice’s Criminal Division in Washington, D.C., for their assistance in this prosecution.
“So much about the game of soccer is ingrained in many cultures around the world, they watch and play it with an almost religious fervor,” stated FBI Assistant Director-in-Charge Sweeney. “The many subjects we have charged in this expansive and complex investigation used the reverence of fans to make millions of dollars illegally while they thought no one was watching. Their mistakes were using banks and companies in the United States to hide their misdeeds, but they got caught. The FBI has worked side-by-side with our national and international partners, traveling all over the world to build this case that wouldn’t have been possible without the great coordination of all the agencies investigating. We will continue searching out everyone involved in these backroom handshakes, and lucrative bribes that were once just part of the game.”
“As the guilty verdicts reflect, Juan Angel Napout and Jose Maria Marin undermined the soccer-related contracting process by entering into corrupt arrangements with executives of sports marketing companies who were more than willing to pay self-serving bribes,” said Special Agent-in-Charge Rowe of IRS Criminal Investigation. “IRS Criminal Investigation, along with our law enforcement partners at the U.S. Attorney’s Office and the FBI, will continue to aggressively investigate those individual and corporate entities that use shell companies and financial accounts in bank secrecy jurisdictions, and in the process utilize the U.S. financial system to facilitate crooked practices within the world's favorite sport.”
The Enterprise the Evidence at Trial [2]
As proved at trial, FIFA and its six continental confederations, together with affiliated regional federations, national member associations, and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide. The enterprise financed its efforts in significant part by commercializing the media and marketing rights associated with various soccer events and tournaments, often through the sale of multi-year contracts covering multiple editions of the tournaments.
The evidence at trial, including witness testimony, contemporaneously kept ledgers, bank records, emails and text messages, and consensual recordings, established that the defendants and their co-conspirators had engaged in a conspiracy to corrupt the enterprise through racketeering activity. Specifically, the defendants and their co-conspirators corrupted the FIFA enterprise through the offer and receipt of tens of millions of dollars in bribes and kickbacks paid by sports marketing companies to soccer officials. In particular, the evidence at trial established that Napout and Marin accepted, or agreed to accept, millions of dollars in bribes in exchange for the media and marketing rights to: (a) multiple editions of the CONMEBOL-sponsored Copa América soccer tournament played periodically by South American national teams, including the Copa América Centenario, a special edition of the tournament played in the United States in 2016; and (b) multiple editions of the CONMEBOL-sponsored Copa Libertadores soccer tournament played annually by South American club teams.
The Copa América bribes were paid, variously, by principals of the sports marketing companies Traffic, Torneos y Competencias (“Torneos”), and Full Play. The Copa Libertadores bribes were paid by Torneos and related entities, using Full Play as an intermediary. In addition, the government proved that Marin agreed to receive millions of dollars worth of bribes in exchange for the media and marketing rights to the Copa do Brasil, a soccer tournament sponsored by the CBF for Brazilian soccer clubs. Marin received and agreed to receive these bribes from Traffic and a Brazilian sports marketing company named Klefer.
Defendants who have pleaded guilty and corporate entities that have entered agreements with the government have agreed to forfeit more than $200,000,000 in this and related cases, and the government has collected more than $60,000,000 of that figure to date. The government has also restrained assets around the world in connection with this and related cases, with the assistance of various foreign governments. As previously announced, all of the forfeited funds are being held in reserve, in order to ensure their availability to satisfy any orders of restitution entered at sentencing for the benefit of individuals or entities that qualify as victims under federal law.When sentenced by Judge Chen, the defendants convicted at trial face a maximum of 20 years in prison on each count of conviction. Each of the defendants also faces liability for millions of dollars in forfeiture and/or restitution, in amounts to be determined at the time of sentencing.
The government’s investigation is ongoing.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant United States Attorneys Samuel P. Nitze, M. Kristin Mace, and Keith D. Edelman are in charge of the trial prosecution, with assistance from Assistant U.S. Attorneys Paul Tuchmann, Kaitlin T. Farrell, and Brian D. Morris.
The Defendants:
JUAN ÁNGEL NAPOUT
Age: 59
Citizenship: ParaguayJOSÉ MARIA MARIN
Age: 85
Citizenship: BrazilE.D.N.Y. Docket No. 15-CR-252 (S-2) (PKC)
[1] Burga was charged in a superseding indictment unsealed on December 3, 2015 with one count of racketeering conspiracy, two counts of wire fraud conspiracy, and two counts of money laundering conspiracy – the same offenses charged against defendant Napout. Peru extradited Burga on the racketeering conspiracy count. Accordingly, the second superseding indictment that served as the trial indictment charged Burga in that count alone.
[2] Facts described here are derived from the evidence put before the jury at trial, as well as publicly filed documents and statements made in open court in this and related cases.
22 December 2017
Uzbek National Living in New Britain Charged with Immigration OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, announced that SIDIKJON MAMADJONOV, 31, a citizen of Uzbekistan residing in New Britain, was arrested today on a criminal complaint charging him with immigration offenses.
MAMADJONOV appeared before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was ordered detained.
As alleged in court documents, MAMADJONOV immigrated to the U.S. in February 2009 and became a lawful permanent resident in September 2010. On September 8, 2014, MAMADJONOV submitted to U.S. Citizenship and Immigration Services an Application for Naturalization, Form N-400.
It is alleged that, on November 20, 2017, in an interview with the FBI, MAMADJONOV stated that on a trip to Turkey in May 2013, he was informed that his brother Saidjon had died in May or June 2013 while fighting in Syria with the “Nusra” group, which was affiliated with ISIS. When MAMADJONOV returned from Turkey, he received a FedEx package that contained what he believed to be Saidjon’s iPhone. The iPhone contained several videos and photographs depicting Saidjon in Syria. MAMADJONOV recalled a video in which Saidjon stated, “Join us brother, we are here.” Also contained on the phone were photographs of Saidjon cleaning weapons in military dress while armed with a weapon, as well as a photograph of Saidjon’s dead body and his bloodied face.
The complaint alleges that in FBI interviews on May 14 and May 29, 2014, and on November 28, 2014, MAMADJONOV responded to questions about the trip he took to Turkey in May 2013, and questions about his brother, Saidjon Mamadjonov. During all three interviews, MAMADJONOV stated that Saidjon Mamadjonov was still alive when he knew he was dead.
It is further alleged that in an FBI interview on August 17, 2016, MAMADJONOV stated that he did not know the whereabouts of Saidjon, had not overheard any discussions of Uzbeks in the U.S. going over to Syria to fight, and was not aware of any Uzbeks travelling to Syria.
It is alleged that in response to Part 11, Question 10 of the Form N-400 MAMADJONOV submitted in September 2014, “Have you ever been a member of, or in any way associated (either directly or indirectly) with: C. A terrorist organization?” MAMADJONOV responded “No.” Also, in response to Part 11, Question 31 of Form N-400, “Have you ever given any Government official information that was materially false, fraudulent or misleading?” MAMADJONOV responded “No.” MAMADJONOV signed the form below the statement “I certify, under penalty of perjury under the laws of the United States of America, that this application, and the evidence submitted with it, are all true and correct.”
It is further alleged that, on October 27, 2016, in an interview with a U.S. Citizenship and Immigration Services officer regarding his Form N-400, MAMADJONOV again provided false statements and concealed information about his association with a member of a known terrorist organization. At the conclusion of the interview, he swore an oath under penalty of perjury that his responses were true.
The complaint charges MAMADJONOV with the unlawful procurement of naturalization, and making a false oath or declaration under penalty of perjury, offenses that carry a maximum term of imprisonment of 10 years. The complaint also charges MAMADJONOV with making false statements on a naturalization application, an offense that carries a maximum term of imprisonment of five years.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, Homeland Security Investigations, Internal Revenue Service – Criminal Investigation Division, U.S. Citizenship and Immigration Services, New Britain Police Department and Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito, with the assistance of the National Security Division’s Counterterrorism Section.
Two More “Southside” Gang Members Sentenced to PrisonRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that two more members of a gang that operated for a decade in the City of York were sentenced to federal prison for racketeering and drug distribution conspiracies.
According to United States Attorney David J. Freed, U.S. District Court Judge Yvette Kane sentenced Richard Nolden, age 27, who was identified as a member of the “Southside” street gang to 25 years’ imprisonment on December 19, 2017. Nolden was already serving a 15-40 year sentence for Murder in the 3rd Degree, and this sentence was concurrent with that sentence. Pursuant to an agreement with the government, Nolden entered a guilty plea to racketeering conspiracy and the parties agreed to the sentence. When imposing sentence, Judge Kane noted Nolden’s role in the January 23, 2012, murder of Sherrod Snellings, a crime that was a part of the “Southside” and “Parkway” gang violence.
Judge Kane also sentenced Angel Schueg, a/k/a “Pocco,” age 28, to 165 months’ imprisonment on December 21, 2017. The government highlighted Schueg’s involvement progressed from trafficking small amounts of marijuana to a substantial trafficker of crack and heroin for the Southside gang. Judge Kane agreed and imposed the guideline sentence.
In November 2015, a jury convicted Schueg of drug trafficking conspiracy after a seven-week trial. It included over 100 witnesses called by the government, including York City Police officers and detectives, federal agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the FBI and gang members who had previously pleaded guilty and featured the presentation of over 500 exhibits. Among the exhibits were videos of violent incidents involving the Southside Gang, drugs, cash and property seized by police and ATF agents as part of the investigation.
The jury convicted the other 11 men who went to trial with Schueg.
Overall, the jury found seven of the 12 men on trial guilty of racketeering conspiracy and conspiracy to distribute drugs, mainly cocaine base (crack) and cocaine, but including heroin in some instances. Two others were found not guilty of the racketeering charge but were found guilty of the drug distribution conspiracy count of the indictment. Three of the defendants were found not guilty of either of the conspiracy counts. The jury found all 12 defendants guilty of possession of illegal drugs with the intent to distribute. Two defendants were also charged and found guilty of, possession of firearms in furtherance of drug trafficking.
The principal defendants, specifically the most violent and those in leading roles, were found guilty of the racketeering conspiracy charges.
The individual defendants previously sentenced in this matter are:
Rolando Cruz, Jr., “Mico,” age 32; racketeering conspiracy, drug trafficking conspiracy, drug possession with intent to deliver and possession of firearms in furtherance of drug trafficking (2 counts) was sentenced on October 3, 2017, to life in prison.
Marc Hernandez, a/k/a “Marky D,” age 32; racketeering conspiracy, drug trafficking conspiracy, drug possession with intent to deliver and possession of firearms in furtherance of drug trafficking (2 counts) was sentenced on October 25, 2017, to life in prison.
Douglas Kelly, a/k/a “Killer,” age 39, racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver was sentenced on December 12, 2017, to life in prison.
Roscoe Villega, a/k/a “P Shawn,” age 44; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 25 years in prison.
Brandon Orr, a/k/a “B Or,” age 23; drug possession with intent to deliver was sentenced to 34 months in prison on November 10, 2016,
Jabree Williams, a/k/a “Minute,” age 24; drug possession with intent to deliver was sentenced to 60 months in prison on May 15, 2017.
Eugene Rice, a/k/a “B Mor,” age 29; drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 200 months in jail on December 7, 2017,
Angel Schueg, a/k/a “Pocko,” age 28; drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 165 months in jail on December 21, 2017,
Jalik Frederick, a/k/a “Murder Cat,” age 22; drug possession with intent to deliver was sentenced to 33 months in prison on June 5, 2017,
The individual defendants previously convicted and awaiting sentencing in this matter are:
Tyree Eatmon, a/k/a “Ree,” age 29; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver is awaiting sentencing,
Maurice Atkinson, a/k/a “Mo,” age 30; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver is awaiting sentencing,
Anthony Sistrunk, a/k/a “Kanye,” age 29; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver is awaiting sentencing,
The following Southside gang members previously pleaded guilty and are awaiting sentencing:
James Abney, a/k/a “Doocs,” age 31.
Malik Sturdivant, a/k/a “Base,” age 25.
Jahkeem Abney, a/k/a “Foo,” age 27.
Ronald Payton, a/k/a “Ron Ron,” age 25.
Cordaress Rogers, a/k/a “Tank,” age 31.
Marquis Williams, a/k/a “Quis,” age 29.
Jerrod Brown, a/k/a “Boogie,” age 28.
Quintez Hall, a/k/a “Q,” age 25.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
The case included the participation and assistance of the Pennsylvania State Police, West York Borough Police Department, Spring Garden Township Police Department, the York County Drug Task Force, the Federal Bureau of Investigation, and the U.S. Marshals Service. Assistant U.S. Attorneys Michael A. Consiglio, William Houser, and Joseph Terz prosecuted the case.
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Two Charged with Running $11 Million Sleep Study Scam that Billed UPS and Costco Health Care Benefit Programs for Unneeded TestsRead the Press Release
LOS ANGELES – The owner of a Studio City clinic and a driver for United Parcel Service have been indicted on health care fraud charges related to unnecessary – and sometimes never-performed – sleep studies that resulted in more than $11 million in bills being submitted to health care benefit programs, primarily for employees of UPS and Costco.
Anna Vishnevsky, 49, of Valley Village, the owner of Atlas Diagnostic Services, Inc., and Eddie Hernandez, 43, of Torrance, who is the UPS driver, were arrested on Tuesday pursuant to an 11-count indictment returned by a federal grand jury on December 14.
Vishnevsky and Hernandez were arraigned on the indictment Tuesday afternoon in United States District Court. After the two defendants entered not guilty pleas to the charges in the indictment, a trial was scheduled for January 30. Vishnevsky was released on a $200,000 bond, and Hernandez was freed on a $30,000 bond.
The case was announced today after United States District Judge George H. Wu signed an order late yesterday unsealing the indictment.
According to the indictment, Vishnevsky, Hernandez and others recruited “patients” by offering cash in exchange for participating in sleep study testing. They also allegedly offered additional cash to those who brought dependents and referred co-workers to participate in the scheme. Vishnevsky and Hernandez allegedly recruited patients knowing that no doctor had prescribed sleep study testing for them, and regardless of whether the testing was medically necessary.
Vishnevsky failed to score or interpret the data from the testing, or provide it to anyone who could score or interpret it, which is necessary for diagnosis and treatment, according to the indictment. Vishnevsky is further alleged to have billed insurance providers for two sleep studies for many patients, even though they went to her clinic on one night only.
Investigators believe that Vishnevsky and others submitted more than $11 million in fraudulent claims, most of which related to beneficiaries of the UPS and Costco health care benefit programs.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Vishnevsky and Hernandez are each charged with 11 counts of health care fraud. If they were to be convicted, each would face a statutory maximum sentence of 10 years in federal prison for each count in the indictment.
The case against Vishnevsky and Hernandez is the result of an investigation by the United States Department of Labor - Office of Inspector General, the Department of Labor - Employee Benefits Security Administration, the Federal Bureau of Investigation, and the Office of Personnel Management - Office of Inspector General.
The case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.
Two Charged in Marijuana Grow OperationsRead the Press Release
BOSTON – Two central Massachusetts men have been charged in federal court in Springfield in connection with marijuana grow operations.
Peter Molle, 35, of Holland, was arrested today and charged with manufacturing marijuana and possessing marijuana with intent to distribute. On Dec. 15, 2017, Eric Vallee, 38, of Sutton was arrested and charged with manufacturing marijuana and possessing marijuana with intent to distribute.
According to court documents, Vallee was featured in a magazine article noting that he regularly harvests 10 pounds of marijuana based on a cultivation timetable that would result in his harvesting hundreds of pounds of marijuana per year. The article noted that Vallee worked with Molle. Both Valle and Molle used bank accounts that featured large amounts of cash deposits that were consistent with the proceeds of drug sales.
In February 2017, agents executed search warrants at a house in Auburn where Vallee then resided, at a house in Sutton where Vallee had previously resided, and at a house in Holland where Molle resided. At each location, agents discovered commercial-style marijuana grow operations. More than 100 marijuana plants were found at Vallee’s Auburn residence, more than 100 marijuana plants at Molle’s Holland residence, and more than 30 marijuana plants were found at the residence in Sutton.
It is alleged that Vallee and Molle continued to engage in substantial marijuana cultivation even after the execution of the search warrants. On Dec. 12, 2017, additional search warrants were executed at Vallee’s house in Sutton and at Molle’s house in Holland. At both locations, significant commercial-style marijuana grow operations were found. In addition, marijuana packaged for sale was recovered at Vallee’s residence.
Each defendant faces a sentence of no greater than five years in prison, a minimum of two years and up to a lifetime of supervised release, and a fine of $250,000. 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 Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Office, made the announcement today. Assistant U.S. Attorney Bill Abely of Lelling’s Worcester Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are each presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Aliens Plead Guilty in Connection with Labor Trafficking Scheme That Targeted Guatemalan National for Forced LaborRead the Press Release
Antonia Marcos Diego, 42, of Forks, Washington, pleaded guilty yesterday in federal court in Tacoma, Washington, to one count of document servitude in furtherance of forced labor, announced Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division and U.S. Attorney Annette L. Hayes of the Western District of Washington. Antonio Francisco-Pablo, 60, of Forks, Washington, previously pleaded guilty on December 18, 2017, to one count of forced labor. U.S. District Judge Ronald B. Leighton scheduled sentencing for March 23, 2018.
According to documents filed in court, defendant Antonia Marcos Diego and her husband, Antonio Francisco-Pablo, lured Diego’s sister to enter the United States from Guatemala, falsely promising that they would provide her with a home, a job earning a lot of money, and a good life. Contrary to these promises, however, the defendants imposed a significant debt on the victim upon her arrival in the United States, and informed her that she would work off the debt by picking salal, a brush commonly used by florists. The defendants retained all of the victim’s earnings and increased her debt by imposing additional charges on her for food, housing, transportation, and utilities. The defendants also kept the victim’s identification documents and threatened her with deportation if she ever tried to leave them. According to court documents, the defendants similarly lured another relative to the United States from Guatemala, and also imposed a significant debt upon him after his arrival.
“These two defendants recruited their own family members on false and fraudulent promises, using the American dream of freedom and opportunity to lure their victims,” said Acting Assistant Attorney General John Gore. “The Department of Justice will continue to pursue labor traffickers like these defendants, who erode our ideals of freedom, opportunity, and the rule of law in order to exploit others for their own greed.”
“These defendants took advantage of a young non-English speaking relative, who was alone in a foreign country, and exploited her for their own enrichment,” said U.S. Attorney Annette L. Hayes. “Their actions were cruel and a clear violation of federal law. We will continue to prioritize protecting such vulnerable victims and prosecuting those who prey on them.”
Antonio Francisco-Pablo faces a possible sentence of up to 20 years in prison while Antonia Marcos Diego faces a possible sentence of up to five years in prison. Per the terms of the plea agreements, both defendants have agreed to make restitution to both victims in an amount to be determined at the time of sentencing.
The case is being prosecuted by Assistant United States Attorney Bruce F. Miyake and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit. The case was investigated by the Department of Homeland Security’s Homeland Security Investigations and the Federal Bureau of Investigation, with assistance from the Clallam County Sheriff’s Office, Port Angeles Police Department, and Washington State Patrol Crime Laboratory.
Transportation Operator Pleads Guilty to Defrauding the State DepartmentRead the Press Release
A local transportation operator pleaded guilty yesterday to stealing federal funds intended for a foreign exchange program maintained by the U.S. Department of State, announced Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Inspector General Steve A. Linick of the U.S. Department of State.
Denon T. Hopkins, 49, of Germantown, Maryland, pleaded guilty to one count of conspiracy to commit theft of public funds and engage in honest services wire fraud before U.S. Senior District Judge T.S. Ellis III of the Eastern District of Virginia. Sentencing is scheduled for April 6, 2018.
According to admissions made in connection with his plea, Hopkins was the operator and de facto owner of a transportation company that contracted with the State Department to provide bus and limousine services to Sports United Division, a State Department component devoted to sports diplomacy, which sponsored a foreign exchange program for emerging athletes and coaches from various countries. The exchange program was managed by George Mason University in Fairfax, Virginia, through a federal grant and cooperative agreement with the State Department. During a time period when Hopkins received $247,200 in grant funds for legitimate transportation services, he and a State Department official conspired to steal portions of the federal money allocated to the exchange program by, among other things, falsifying vendor-related invoices and making fraudulent checks payable to Hopkins. In total, Hopkins stole approximately $17,335 from the State Department. He also admitted that he used portions of the funds to pay kickbacks to the State Department official to retain his transportation contract.
The Department of State’s Office of Inspector General and the FBI’s Washington Field Office investigated the case. Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Kimberly R. Pedersen of the Eastern District of Virginia are prosecuting the case. Former Special Assistant U.S. Attorney Brian D. Harrison provided assistance on the case.
Stratford Tax Preparer Pleads GuiltyRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that JUAN SILVA, 37, of Stratford, waived his right to be indicted and pleaded guilty yesterday before U.S. District Judge Michael P. Shea in Hartford to preparing false federal income tax returns.
According to court documents and statements made in court, SILVA operated Oficina Hispana, a multi-service business that included tax return preparation. Between approximately 2011 and 2017, SILVA falsified itemized deductions and unreimbursed employee business expenses on numerous returns that he prepared for clients. In addition, for the 2011, 2012 and 2013 tax years, SILVA made substantial deposits of business receipts from his tax preparation business into his personal bank accounts, and failed to report to the IRS a total of more than $306,000 in income.
SILVA pleaded guilty to one count of aiding and assisting the filing of a false tax return. At sentencing, he faces a maximum term of imprisonment of three years, a fine of up to approximately $300,000, and restitution of $143,693. A sentencing date is not scheduled.
The IRS is taking action to recover unpaid taxes from SILVA’s clients.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Scott W. Brady Sworn in as U.S. Attorney for the Western District of PennsylvaniaRead the Press Release
PITTSBURGH – Scott W. Brady was sworn in today as the 58th United States Attorney for the Western District of Pennsylvania and began his duties immediately.
"I would like to thank President Trump for this great honor of being appointed U.S. Attorney for the Western District of Pennsylvania, and thank Senators Toomey and Casey for their strong support throughout the confirmation process," said U.S. Attorney Brady. "I look forward to working with the outstanding attorneys and staff of the U.S. Attorney’s Office to serve the people of Western Pennsylvania."
Chief U.S. District Judge Joy Flowers Conti administered the oath to Mr. Brady, 48, of Ohio Township, in a ceremony this morning.
Prior to becoming U.S. Attorney, Mr. Brady was head of litigation for Federated Investors, Inc. in Pittsburgh. From 2004 to 2010, he served an Assistant U.S. Attorney in the Western District of Pennsylvania. He previously was an associate for the Jones Day and Reed Smith law firms. Mr. Brady also served as an Adjunct Professor of Law at the University of Pittsburgh where he taught Constitutional Law.
Mr. Brady is a 1991 graduate of Harvard University and a 2001 graduate of the Pennsylvania State University’s Dickinson School of Law.
Mr. Brady was nominated for U.S. Attorney by President Donald Trump on September 8 and confirmed by the United States Senate on December 14. He will lead an office currently staffed with 59 Assistant U.S. Attorneys across the Criminal, Civil and Appeals divisions, and 57 support staff in offices in Pittsburgh, Erie and Johnstown.
The Western District of Pennsylvania covers the 25 westernmost counties in the Commonwealth.
Pocatello Man Sentenced to Federal Prison for Transporting Child PornographyRead the Press Release
POCATELLO – Craig Marshall Grayson, 31, of Pocatello, Idaho, was sentenced yesterday in federal court to 151 months in prison, followed by eight years of supervised release, for transportation of child pornography, U.S. Attorney Bart M. Davis announced. U.S. District Judge David C. Nye also ordered Grayson to pay a $5,000 fine, pay $5,100 in special assessments and forfeit the computer and storage devices used in the commission of the charged offense. Grayson pleaded guilty to the crime in September.
According to the plea agreement, law enforcement agents downloaded four sexually exploitative videos of a minor from an individual later identified as Grayson between July 5 and August 12, 2016. A search of Grayson’s home and computer devices revealed his additional possession of approximately 978 images and 65 videos of child pornography.
“This sentence is just punishment for Mr. Grayson’s criminal conduct,” said Davis. “The U.S. Attorney’s Office is dedicated to prosecuting and seeking long sentences for individuals who obtain, possess, view and share child pornography.”
“Homeland Security Investigations (HSI) is committed to bringing to justice those who sexually exploit children,” said Bradford A. Bench, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Seattle. “This case exemplifies the long reach of HSI, and its ability to coordinate and pursue investigative efforts that lead to predators like Grayson to be sentenced to a lengthy prison sentence.”
The case was investigated by HSI and the Idaho Internet Crimes Against Children Task Force.
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.”
Perkinsville Man Pleads Guilty in Armed Pharmacy and Bank Robbery CaseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Michael Bickford, age 38, formerly of Perkinsville, Vermont, pled guilty on December 18, 2017 in the United States District Court in Burlington to charges stemming from the December 5, 2016 armed robbery of the River Street Pharmacy in Springfield, Vermont. Bickford also admitted to the armed robberies of the Windsor County South Credit Union in Springfield, Vermont on October 18, 2016 and the Mascoma Savings Bank in Springfield, Vermont on November 10, 2016. Bickford, who has been detained since his federal arrest in May 2017, appeared before District Judge William K. Sessions III and pled guilty to robbery and carrying and using a firearm.
As described during the change of plea proceedings, at about 8:30 a.m. on December 5, 2016, Bickford entered the River Street Pharmacy located at 100 River Street in Springfield, Vermont armed with a pistol and wearing a dark-colored mask. Bickford approached the counter, pointed the pistol at a pharmacy employee’s midsection, and demanded prescription medications.
While the employee went to get prescription medications, Bickford pointed the pistol at a second employee. After the first employee gave Bickford the prescription medications, Bickford exited. Later that day, law enforcement arrested Bickford and found the loaded pistol in his vehicle, along with the prescription medications and pill bottles stolen from the River Street Pharmacy.
During the change of plea proceedings, Bickford also admitted that on October 18, 2016, he robbed the Windsor County South Credit Union located at 383 River Street in Springfield, Vermont. During this robbery, Bickford was armed with a handgun and unlawfully took and obtained about $3,324. Bickford further admitted that on November 10, 2016, he robbed the Mascoma Savings Bank located at 270 River Street in Springfield, Vermont. During this robbery, Bickford was armed with a handgun and unlawfully took and obtained about $12,000.
Under federal law, the robbery charge carries a maximum sentence of twenty years, and the charge of using and carrying a firearm carries a maximum sentence of life imprisonment, but the plea agreement caps Bickford’s sentence at eight years. The sentence will be advised by the Federal Sentencing Guidelines.
The case was investigated by the Springfield, Vermont Police Department, the Weathersfield, Vermont Police Department, the Windsor County Sheriff’s Department, the Vermont State Police, and the Federal Bureau of Investigation. The Windsor County State’s Attorney’s Office also assisted in the investigation. “This is an excellent example of local, state, and federal law enforcement working together to keep our communities safe and bring violent criminals to justice. During this holiday season, we are thankful for our partnership with the F.B.I. and U.S. Attorney's Office,” said David J. Cahill, Windsor County State's Attorney.
Bickford is represented by Jordana Levine of Marsicovetere & Levine Law Group, P.C. The United States is represented by Assistant United States Attorney John J. Boscia.
New Prosecutor Added to Combat Violent CrimeRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a new Assistant U.S. Attorney will be hired to combat violent crime in the Kansas City metropolitan area.
The new position was created as part of the Department of Justice initiative against violent crime. U.S. Attorney General Jeff Sessions recently announced that 40 new Assistant U.S. Attorney positions have been created in 27 districts.
This additional staffing follows the designation of the Western District of Missouri as a Public Safety Partnership (PSP) Diagnostic Site to work with local law enforcement partners on public safety and violence reduction. Eight districts nationwide received this designation.
PSP was established in June 2017 and provides an innovative framework for the Department of Justice to enhance its support of state and local law enforcement officers and prosecutors in the investigation, prosecution, and deterrence of violent crime, especially crime related to gun violence, gangs, and drug trafficking. This approach serves as a platform to directly engage with cities to identify and prioritize resources that will help local communities address violent crime.
PSP enables cities to consult with and receive coordinated training and technical assistance and an array of resources from the Department of Justice to enhance local violence reduction strategies. PSP provides data-driven, evidence-based strategies tailored to the unique local needs of participating cities to address serious violent crime challenges tailored to their unique local needs.
PSP supports law enforcement, communities, and justice systems at the state and local level to prevent and reduce crime, combat violence and enhance public safety through the use of evidence-based practices. Among the components of a PSP Diagnostic Site are: • Relationship building; • Data collection and analysis; • Training and technical assistance; and
• Community engagement in violence reduction strategies.
Modesto Man Arrested for Attempting to Provide Material Support to a Terrorist OrganizationRead the Press Release
SACRAMENTO, Calif. — A federal complaint was unsealed today, charging Everitt Aaron Jameson, 26, of Modesto, with attempting to provide material support to a foreign terrorist organization, Attorney General Jeff Sessions and United States Attorney Phillip A. Talbert announced.
According to court documents, Jameson had several online interactions with a confidential source in which he expressed support for the Oct. 31, 2017, terrorist attack in New York City and offered his services for “the cause.” In subsequent communications with an undercover agent, Jameson referred to his training in the U.S. military and noted he had been trained for combat and war. Jameson later met with another undercover agent whom he believed to be associated with the senior leadership of the foreign terrorist organization, ISIS (the Islamic State of Iraq and al-Sham, also known as ISIL). During his interactions with this undercover agent, Jameson offered to carry out violent acts and to provide financial support for the terrorist organization.
“The Department of Justice works resolutely every day to prevent terrorist attacks,” said Attorney General Sessions. “In my time back at the Department, nothing has impressed me more. Today, our incredible law enforcement officers have once again helped thwart an alleged plot to kill Americans. I want to thank the FBI agents and federal prosecutors and everyone else who helped make this possible. The threat from radical Islamic terrorism is real — and it is serious — but the American people can be assured that the Department of Justice remains vigilant in protecting our homeland.”
U.S. Attorney Phillip A. Talbert stated, “I want to express my thanks to the FBI for working in partnership with my office on this case. We are grateful that our hardworking law enforcement partners remain vigilant in protecting our communities, especially during this holiday season.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Dawrence W. Rice and Christopher D. Baker are prosecuting the case with Trial Attorney Brenda Sue Thornton from the U.S. Department of Justice’s National Security Division, Counterterrorism Section.
If convicted, Jameson faces a maximum statutory penalty of 20 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.
Manchester Man Pleads Guilty to Conspiracy to Traffic Large Quantities of MethamphetamineRead the Press Release
CONCORD, N.H. - Acting United States Attorney John J. Farley announced today that
Brian O’Rourke, 54, of Manchester, pleaded guilty to participating in a conspiracy to distribute methamphetamine.
According to court documents and statements made during today’s plea hearing, on or about April 19, 2017, U.S. Postal Inspectors intercepted a suspicious package mailed to O’Rourke from Las Vegas, Nevada, that they opened pursuant to a federal search warrant. Inside, they found 5.349 kilograms – approximately 12 pounds -- of highly potent methamphetamine. After removing the methamphetamine and substituting a “dummy” substance to restore the package to its original weight, Postal Inspectors arranged for the delivery of the package to O’Rourke. Surveilling law enforcement officers then watched O’Rourke as he drove to an area behind a Manchester furniture store, where O’Rourke met with Dustin Moss, and transferred the package to Moss. Four days later, O’Rourke received another package, which Postal Inspectors opened with O’Rourke’s consent. Inside was an additional 3.571 kilograms – or eight pounds -- of highly potent methamphetamine.
Dustin Moss, 29, of Manchester, Katrina Jones, 39, of Goffstown, and Sabrina Moss, 31, of Manchester, also face federal charges related to this methamphetamine trafficking conspiracy. Dustin Moss and Katrina Jones are scheduled for trial on March 6, 2018. Sabrina Moss is scheduled for trial on January 23, 2018.
O’Rourke’s sentencing has been scheduled for March 30, 2018.
“Although our state is facing a significant opioid crisis, other dangerous drugs continue to present a threat to the Granite State,” said Acting U.S. Attorney Farley. “Methamphetamine is a deadly drug that has been linked to overdoses in New Hampshire. I commend the law enforcement officers for their work in this case, which prevented a very substantial amount of methamphetamine from being distributed in our community.”
This matter was investigated by the United States Postal Inspection Service, the N.H. Attorney General’s Drug Task Force and the U.S. Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Bill Morse and John Davis.
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Lawful Permanent Resident from Uzbekistan Charged with Immigration OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, announced that SIDIKJON MAMADJONOV, 31, a citizen of Uzbekistan residing in New Britain, was arrested today on a criminal complaint charging him with immigration offenses.
MAMADJONOV appeared before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was ordered detained.
As alleged in court documents, MAMADJONOV was admitted to the U.S. in February 2009 and became a lawful permanent resident in September 2010. On September 8, 2014, MAMADJONOV submitted to U.S. Citizenship and Immigration Services an Application for Naturalization, Form N-400.
The complaint alleged that, on November 20, 2017, in an interview with the FBI, MAMADJONOV stated that on a trip to Turkey in May 2013, he was informed that his brother Saidjon had died in May or June 2013 while fighting in Syria with the “Nusra” group, which was affiliated with ISIS. When MAMADJONOV returned from Turkey, he received a FedEx package that contained what he believed to be Saidjon’s iPhone. The iPhone contained several videos and photographs depicting Saidjon in Syria. MAMADJONOV recalled a video in which Saidjon stated, “Join us brother, we are here.” Also contained on the phone were photographs of Saidjon cleaning weapons in military dress while armed with a weapon, as well as a photograph of Saidjon’s dead body and his bloodied face.
The complaint alleges that in FBI interviews on May 14 and May 29, 2014, and on November 28, 2014, MAMADJONOV responded to questions about the trip he took to Turkey in May 2013, and questions about his brother, Saidjon Mamadjonov. During all three interviews, MAMADJONOV stated that Saidjon Mamadjonov was still alive when he knew he was dead.
The complaint further alleged that in an FBI interview on August 17, 2016, MAMADJONOV stated that he did not know the whereabouts of Saidjon, had not overheard any discussions of Uzbeks in the U.S. going over to Syria to fight, and was not aware of any Uzbeks travelling to Syria.
The complaint alleged that in response to Part 11, Question 10 of the Form N-400 MAMADJONOV submitted in September 2014, “Have you ever been a member of, or in any way associated (either directly or indirectly) with: C. A terrorist organization?” MAMADJONOV responded “No.” Also, in response to Part 11, Question 31 of Form N-400, “Have you ever given any Government official information that was materially false, fraudulent or misleading?” MAMADJONOV responded “No.” MAMADJONOV signed the form below the statement “I certify, under penalty of perjury under the laws of the United States of America, that this application, and the evidence submitted with it, are all true and correct.”
The complaint further alleged that, on October 27, 2016, in an interview with a U.S. Citizenship and Immigration Services officer regarding his Form N-400, MAMADJONOV again provided false statements and concealed information about his association with a member of a known terrorist organization. At the conclusion of the interview, he swore an oath under penalty of perjury that his responses were true.
The complaint charges MAMADJONOV with the unlawful procurement of naturalization, and making a false oath or declaration under penalty of perjury, offenses that carry a maximum term of imprisonment of 10 years. The complaint also charges MAMADJONOV with making false statements on a naturalization application, an offense that carries a maximum term of imprisonment of five years.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, Homeland Security Investigations, Internal Revenue Service – Criminal Investigation Division, U.S. Citizenship and Immigration Services, New Britain Police Department and Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito, with the assistance of the National Security Division’s Counterterrorism Section.
L.A. Fashion District Company and Two Owners Plead Guilty to Federal Charges Stemming from Money Laundering SchemeRead the Press Release
LOS ANGELES – In a case stemming from an investigation into Fashion District businesses using "Black Market Peso Exchange" schemes to launder narcotics proceeds for international drug cartels, an import-export textile business and two executives have pleaded guilty to federal money laundering and tax charges.
Pacific Eurotex Corp. and its owners – Morad "Ben" Neman and Hersel Neman – pleaded guilty yesterday to federal charges in an indictment that accused them of using the business to receive bulk cash that they knew or believed to be the proceeds of narcotics trafficking.
The defendants admitted in court documents that they failed to report to federal authorities the receipt of this bulk cash, and that they "structured" frequent deposits of the cash, in amounts less than $10,000, to avoid a bank reporting requirement that would have drawn the scrutiny of law enforcement.
The Nemans also pleaded guilty to conspiring to defraud the United States by maintaining two sets of business records in order to conceal income for tax purposes.
A Black Market Peso Exchange scheme is designed to assist drug traffickers who have United States currency that they want to send to a foreign country, such as Mexico, and convert into pesos. As part of the scheme, a broker finds business owners in the foreign country who buy goods from U.S. companies and who need dollars to pay for those goods. The broker arranges for the illegally obtained dollars to be delivered to the United States-based vendors, such as Pacific Eurotex, and these illegally obtained dollars are used to pay for the goods purchased by the foreign customers. Once the goods are shipped to the foreign country and sold by the foreign business, the pesos are turned over to the broker, who then pays the drug trafficker in the local currency of the foreign country, thus completing the laundering of the illegally obtained dollars.
Pacific Eurotex received, laundered and structured approximately $370,000 in bulk cash delivered on four separate occasions over 2½ months in 2013 by an undercover agent posing as a money courier, according to court documents. The company laundered this money after being specifically advised by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations that bulk cash payments were frequently derived from illegal activity and that it was required to report cash transactions involving more than $10,000 in currency.
The defendants who appeared yesterday in United States District Court are:
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Pacific Eurotex, which pleaded guilty to conspiring to launder money and conspiring to structure monetary transactions with a domestic financial institution;
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Morad "Ben" Neman, 57, of Westwood, the chief executive officer of Pacific Eurotex, who pleaded guilty to four counts – conspiring to structure monetary transactions with a domestic financial institution, conspiring to defraud the United States by obstructing the lawful functions of the Internal Revenue Service, subscribing to and filing a false 2013 tax return understating income he received from Pacific Eurotex, and aiding and assisting in the filing of another false 2013 tax return; and
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Hersel Neman, 58, of Beverly Hills, the chief financial officer of Pacific Eurotex and brother of Morad Neman, who pleaded guilty to three counts – conspiring to launder money, conspiring to defraud the United States by obstructing the lawful functions of the IRS, and subscribing to and filing a false tax return.
All three defendants are scheduled to be sentenced by United States District Judge John A. Kronstadt on June 14.
In court documents, the defendants admitted that, as part of the money laundering scheme, they instructed other individuals to deposit the cash into the personal Wells Fargo bank account of Hersel Neman’s wife. "These deposits, 384 in all, were divided into increments less than $10,000 each with the intent to prevent Wells Fargo, a domestic financial institution, from filing Currency Transaction Reports," according to the documents. The defendants have agreed to forfeit to the United States nearly $3.18 million, which includes the narcotics proceeds they received and deposited in structured cash transactions into the Wells Fargo account.
When they are sentenced by Judge Kronstadt, Morad Neman will face a statutory maximum sentence of 21 years in federal prison, and Hersel Neman will face a sentence of up to 28 years. Pacific Eurotex faces a statutory maximum sentence of up to 10 years’ probation and almost $2 million in fines.
The indictment in this case names two other defendants who are scheduled to go on trial on March 6. Mehran Khalili, 49, of Beverly Hills, who is a brother in law of Hersel Neman, is charged with conspiring to structure cash transactions; and Alma Villalobos, 55, of Arleta, the in-house accountant and bookkeeper for Pacific Eurotex, faces several charges, including conspiracy to launder money.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The investigation into Pacific Eurotex was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS - Criminal Investigation.
This case is being prosecuted by Assistant United States Attorneys Julie J. Shemitz, Jamie A. Lang and Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force.
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Kmart Corporation to Pay U.S. $32.3 Million to Resolve False Claims Act Allegations for Overbilling Federal Health Programs for Generic Prescription DrugsRead the Press Release
Kmart Corporation, a wholly owned subsidiary of Sears Holdings Corporation (SHC), has agreed to pay $32.3 million to the United States to settle allegations that in-store pharmacies in Kmart stores failed to report discounted prescription drug prices to Medicare Part D, Medicaid, and TRICARE, the health program for uniformed service members and their families, the Justice Department announced today.
The agreement resolves allegations arising from a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. The 2008 lawsuit, which was filed by James Garbe in the federal district in Los Angeles and later transferred to the Southern District of Illinois, alleged that Kmart pharmacies offered discounted generic drug prices to cash-paying customers through various club programs but knowingly failed to disclose those prices when reporting to federal health programs its usual and customary prices, which are typically used by those programs to establish reimbursement rates.
“Pharmacies that are not fully transparent about drug pricing can cause federal health programs to overpay for prescription drugs.” said Acting Assistant Attorney General Chad A. Readler for the Department’s Civil Division. “This settlement should put pharmacies on notice that there will be consequences if they attempt to improperly increase payments from taxpayer-funded health programs by masking the true prices that they charge the general public for the same drugs.”
“Pharmacies and other providers who receive funds from taxpayers have a duty to follow the law,” said U.S. Attorney Donald S. Boyce for the Southern District of Illinois. “If healthcare providers do not provide fair and transparent pricing as required under the law, the False Claims Act allows the government and whistleblowers to ensure that the Medicare, Medicaid, and TRICARE programs are made whole.”
The settlement agreement with the United States is a part of a global $59 million settlement that includes a resolution of state Medicaid and insurance claims against Kmart. Garbe, who litigated the case after the government declined to intervene in the action, will receive $9.3 million.
The case was handled by the Justice Department’s Civil Division and the U.S. Attorney’s Offices for the Southern District of Illinois and Central District of California. Auditing assistance for the government’s investigation was provided by the U.S. Attorney’s Office for the Central District of California and the National Association of Medicaid Fraud Control Units. Investigative assistance was provided by the U.S. Department of Health and Human Services, Office of Inspector General.
The lawsuit is captioned U.S. ex rel. Garbe v. Kmart Corp., Case No. 12-CV-881-NJR-PMF (S.D. Ill.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).
Killingly Man Who Provided Firearm to Convicted Felon is SentencedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ALBERT BONNER, 31, of Killingly, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to eight months of imprisonment, followed by two years of supervised release, for providing a firearm to a convicted felon.
According to court documents and statements made in court, on January 4, 2017, law enforcement officers removed a loaded Beretta 9mm Nano handgun and an improvised explosive device from the Killingly home of Blain Kollbeck The handgun had an obliterated serial number, and was repainted orange. The investigation revealed that BONNER was the registered owner of the gun, and that BONNER provided the gun to Kollbeck, who BONNER knew was a convicted felon.
On July 31, 2017, BONNER pleaded guilty to one count of providing a firearm to a convicted felon.
Kollbeck, 33, was arrested on a federal criminal complaint on January 10, 2017. On December 18, he pleaded guilty to one count of possession of a firearm by a previously convicted felon. He is released on $100,000 bond pending sentencing, which is scheduled for March 12, 2018.
This matter has been investigated by the Connecticut State Police and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anastasia E. King.
Keppel Offshore & Marine Ltd. and U.S.-Based Subsidiary Agree to Pay $422 Million in Global Penalties to Resolve Foreign Bribery CaseRead the Press Release
Keppel Offshore & Marine Ltd. (KOM), a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary, Keppel Offshore & Marine U.S.A. Inc. (KOM USA), have agreed to pay a combined total penalty of more than $422 million to resolve charges with authorities in the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil. KOM USA pleaded guilty today in the Eastern District of New York in connection with the resolution. In addition, a guilty plea by a former senior member of KOM’s legal department was unsealed.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, John P. Cronan, Acting Assistant Attorney General of the Department of Justice’s Criminal Division, and Stephen E. Richardson, Assistant Director, Federal Bureau of Investigation, Criminal Investigative Division (FBI), made the announcement.
“The resolutions with KOM and its U.S. subsidiary are the result of a multinational effort to investigate and prosecute a corruption scheme that resulted in the payment by the defendant companies of over $50 million in bribes to Brazilian officials and in profits for the defendant companies of over $350 million from business corruptly obtained in Brazil,” said Acting U.S. Attorney Rohde. “In an attempt to conceal their crimes, the defendants used the global financial system – including the United States banking system – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The United States, working with its law enforcement partners abroad, will continue to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of government officials and legitimate governmental functions.”
“Today’s resolution once again underscores the importance of the Department of Justice’s collaboration with foreign authorities to hold corrupt companies and individuals accountable for their crimes, while ensuring the fair and appropriate allocation of fines and penalties,” said Acting Assistant Attorney General Cronan. “This case also represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil. The Criminal Division is committed to working with our international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.”
“The resolution to this investigation shows to those around the world that the FBI and our law enforcement partners are dedicated to work together to bring justice to companies who play outside the rule of law,” said FBI Assistant Director Richardson. “The FBI won’t stand by while individuals operate their business illegally using bribes.”
The Bribery Scheme
According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate the Foreign Corrupt Practices Act (“FCPA”) by paying approximately $55 million in bribes to officials at the Brazilian state-owned oil company Petrobras, and to the then-governing political party in Brazil, in order to win 13 contracts with Petrobras and another Brazilian entity. KOM effectuated and concealed the bribe payments by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party. KOM USA participated in this conspiracy from approximately 2007 to 2014.
The Corporate Resolutions
KOM entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the U.S. District Court for the Eastern District of New York (the “United States”) in connection with a criminal Information filed today in the Eastern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. In addition, KOM USA pleaded guilty and was sentenced by the Honorable Kiyo A. Matsumoto on a one-count criminal Information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the United States, KOM will pay a total criminal fine of $422,216,980, with a criminal penalty due to the United States of $105,554,245, including a $4,725,000 criminal fine paid by KOM USA. As part of the deferred prosecution agreement, KOM also committed to implement rigorous internal controls and to cooperate fully with the United States’ ongoing investigation.
In related proceedings, the company settled with the Ministério Público Federal (MPF) in Brazil and the Attorney General’s Chambers (AGC) in Singapore. The United States will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving $211,108,490, equal to 50 percent of the total criminal penalty, and Singapore receiving $105,554,245, equal to 25 percent of the total criminal penalty.
In reaching the resolutions with the United States, KOM and KOM USA received credit for their substantial cooperation with the United States’ investigation and for taking extensive remedial measures. For example, KOM has terminated and otherwise disciplined employees involved in the criminal conduct, and it has implemented an enhanced system of compliance and internal controls to address and mitigate corruption risks. Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.
The United States also unsealed charges today against a former senior member of KOM’s legal department, who pleaded guilty to one count of conspiracy to violate the FCPA on August 29, 2017 in the Eastern District of New York. He is awaiting sentencing.
The case is being prosecuted by Assistant U.S. Attorneys Alixandra Smith and Patrick Hein of the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorneys Derek J. Ettinger and David M. Fuhr and Assistant Chief Christopher J. Cestaro of the Criminal Division’s Fraud Section. The FBI’s International Corruption squad in Houston investigated this case.
The Criminal Division’s Office of International Affairs also provided substantial assistance. The SEC and the Ministerio Publico Federal in Brazil the Departamento de Polícia Federal and the Office of the Attorney General in Switzerland provided significant cooperation.