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14 December 2017
Maine Harvester Enters Guilty Plea, Maine Dealers Sentenced for Illegally Trafficking American EelsRead the Press Release
Yarann Im was sentenced to six months imprisonment and three years of supervised release and Thomas Choi was sentenced to six months in prison with a fine of $25,000 today for trafficking juvenile American eels (also called “elvers” or “glass eels”) in violation of the Lacey Act, following a hearing in federal district court in Portland, Maine. The sentence was announced by Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division.
In October 2016, Im pleaded guilty to violating the Lacey Act by purchasing elvers in interstate commerce that had been harvested illegally in Virginia, North Carolina, and Massachusetts. Court documents indicate that Im trafficked at least 480 pounds of elvers, which is almost one-million individual eels, and worth more than $500,000. Im subsequently sold these elvers to international buyers and exported them from the United States.
This sentencing follows the entry of a guilty plea on December 12, 2017, by Albert Cray in federal district court in Portland, Maine, to trafficking elvers in violation of the Lacey Act. As part of his guilty plea, Cray admitted to illegally transporting or selling elvers in interstate commerce, which had been harvested illegally in New Jersey. According to the statement of facts filed with the plea agreement, Cray was a fisherman from Maine, who travelled to locations near Millville, New Jersey, to illegally harvest elvers. Cray then sold the elvers to a dealer from Maryland, who exported them from the United States to buyers in Asia. In 2013, Cray trafficked approximately $253,518 worth of illegally-harvested elvers.
“The poaching and illegal selling of American eels negatively impacts not only the species but also the economies of our East Coast states and the livelihood of local U.S. fishermen who legally harvest these eels,” said Edward Grace, Acting Chief of Law Enforcement for the U.S. Fish and Wildlife Service. “These recent court actions should serve as a warning to those who illegally profit from our country’s natural resources. You will be caught and held accountable.”
Eels are highly valued in East Asia for human consumption. Historically, Japanese and European eels were harvested to meet this demand; however, overfishing has led to a decline in these populations. As a result, harvesters have turned to the American eel to fill the void.
American eels spawn in the Sargasso Sea, an area of the North Atlantic Ocean bounded on all sides by ocean currents. They then travel as larvae from the Sargasso to the coastal waters of the eastern United States, where they enter a juvenile or elver stage, swim upriver, and grow to adulthood in fresh water. Elvers are exported for aquaculture in East Asia, where they are raised to adult size and sold for food. Harvesters and exporters of American eels in the United States can sell elvers to East Asia for more than $2,000 per pound.
Because of the threat of overfishing, Atlantic Coast states have cooperatively prohibited elver harvesting in all but two states: Maine and South Carolina. Maine and South Carolina heavily regulate elver fisheries, requiring that individuals be licensed and report all quantities of harvested eels to state authorities. Other Atlantic coast states, including Virginia, have commercial fisheries for adult or “yellow” eels.
This case was the result of “Operation Broken Glass,” a multi-jurisdiction U.S. Fish and Wildlife Service investigation into the illegal trafficking of American eels. To date, the investigation has resulted in guilty pleas for 19 individuals whose combined conduct resulted in the illegal trafficking of more than $5.25 million worth of elvers.
Operation Broken Glass was conducted by the U.S. Fish and Wildlife Service and the Justice Department’s Environmental Crimes Section in collaboration with the Maine Marine Patrol, South Carolina Department of Natural Resources Law Enforcement Division, New Jersey Division of Fish and Wildlife Bureau of Law Enforcement, Connecticut Department of Energy and Environmental Protection Conservation Police, Virginia Marine Resources Commission Police, USFWS Refuge Law Enforcement, National Oceanic and Atmospheric Administration Office of Law Enforcement, Massachusetts Environmental Police, Rhode Island Department of Environmental Management Division of Law Enforcement, New York State Environmental Conservation Police, New Hampshire Fish and Game Division of Law Enforcement, Maryland Natural Resources Police, North Carolina Wildlife Resource Commission Division of Law Enforcement, Florida Fish and Wildlife Conservation Commission, Yarmouth, Massachusetts Division of Natural Resources, North Myrtle Beach, South Carolina Police Department and the Atlantic States Marine Fisheries Commission.
The government is represented by Environmental Crimes Section Trial Attorneys Cassandra Barnum and Shane Waller.
Louisiana Return Preparer Sentenced to Seven Years in Prison for Filing Fraudulent Tax ReturnsRead the Press Release
WASHINGTON – A Louisiana tax return preparer was sentenced to seven years in prison today for filing fraudulent returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Duane A. Evans for the Eastern District of Louisiana.
According to documents filed with the court, Shawanda Nevers, aka Shawanda Hawkins, Shawanda Bryant, and Shawanda Johnson, 49, operated a series of businesses in the LaPlace area, including 3LJ’s Café Services & Sports Bar LLC and 3LJ’s Industrial Service Solutions LLC. Between 2011 and 2016, Nevers filed fraudulent income tax returns that included fake business losses, deductions and tax credits and sought refunds to which her clients were not entitled. Despite a federal judge permanently enjoining her from preparing federal tax returns in 2014, Nevers continued to file fraudulent returns.
In addition to the term of prison imposed, U.S. District Court Judge Susie Morgan ordered Nevers to serve one year of supervised release and to pay restitution to the IRS for $6,934,764 in losses that she caused. She also was ordered to pay $128,900 to the Deepwater Horizon Oil Spill Trust and $964 to the Social Security Administration. Nevers pleaded guilty to filing fraudulent tax returns in August.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Evans commended special agents of IRS Criminal Investigation and the U.S. Secret Service, who conducted the investigation, and Assistant U.S. Attorneys Hayden Brockett and Loan “Mimi” Nguyen, and Trial Attorney Grace Albinson of the Tax Division, who prosecuted this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Long Island Woman Indicted for Bank Fraud and Money Laundering to Support TerroristsRead the Press Release
A five-count indictment was unsealed earlier today in federal court in Central Islip, New York, charging Zoobia Shahnaz with bank fraud, conspiracy to commit money laundering and three substantive counts of money laundering. As alleged in the indictment and court filings, the defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies. She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization. After consummating the scheme, the defendant attempted to leave the United States and travel to Syria. Shahnaz, a U.S citizen, was arrested yesterday, and her initial arraignment is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
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 James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, the defendant Zoobia Shahnaz engaged in a bank fraud scheme, purchased Bitcoin and other cryptocurrencies and laundered money overseas, intending to put thousands of dollars into the coffers of terrorists,” stated Acting United States Attorney Rohde. “The indictment reflects the resolve of this Office, together with our law enforcement partners, to investigate and prosecute anyone who would seek to support terrorists, including those who would perpetrate financial crimes to do so.” Ms. Rohde extended her grateful appreciation to the FBI’s Joint Terrorism Task Force comprising a large number of federal, state and local agencies from the region.
“Syria is a perilous and violent war-torn country, but the subject in this investigation was allegedly so determined to assist ISIS that she planned a covert, illegal entry into Syria,” stated FBI Assistant Director-in-Charge Sweeney. “On top of which, she allegedly tried to launder virtual currency to bolster terrorists’ dwindling financial support. The FBI New York Joint Terrorism Task Force kept this woman from her dangerous and potentially deadly goal. We will do all we can to stop the next person hoping to do the same. We want to thank our law enforcement partners Suffolk County Police Department, with whom we worked this case side-by-side.”
As set forth in the indictment and court filings, in or about and between March 2017 and the date of her attempted travel to Syria on July 31, 2017, the defendant engaged in a scheme to defraud numerous financial institutions. Specifically, Shahnaz obtained a loan for approximately $22,500 by way of materially false representations. She also fraudulently applied for over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online. She then engaged in a pattern of financial activity, culminating in several wire transactions, totaling over $150,000, to individuals and apparent shell entities in Pakistan, China and Turkey. These transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS.
After conducting these financial transactions, the defendant sought to travel to Syria herself. She was questioned by law enforcement at John F. Kennedy International Airport when she attempted to board a flight to Islamabad, Pakistan. Her itinerary included a multi-day layover in Istanbul, Turkey – a common point of entry for individuals travelling from Western countries to join ISIS in Syria.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Shahnaz faces a maximum of 30 years for the bank fraud charge and 20 years on each money laundering count.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
Zoobia Shanaz
Age: 27
Brentwood, NYE.D.N.Y. Docket No. 17-CR-0690
Local Man Arrested for $30 Million Securities and Wire Fraud SchemeRead the Press Release
HOUSTON – A 62-year-old Houston man has been taken into custody following the return of a federal indictment charging him for his role in a securities fraud and wire fraud scheme involving more than $30 million, announced Acting U.S. Attorney Abe Martinez.
A grand jury returned a 21-count indictment Dec. 7, 2017, against Ray Charles Davis. He was taken into custody this morning and is expected to make his initial appearance before U.S. Magistrate Judge Dena H. Palermo at 10:00 a.m. today.
According to the indictment, the scheme involved defrauding investors in Behavioral Recognition Systems Inc. (BRS) by making false and misleading statements to investors in order to fraudulently induce them to purchase shares of BRS. He also unlawfully embezzled money from BRS, according to the charges.
Pursuant to the scheme, Davis allegedly made false statements to investors regarding his salary, how the proceeds of their investments would be used and the financial condition of BRS. As a result of the scheme, Davis defrauded investors out of a total of approximately $32 million and unlawfully embezzled more than $11 million from BRS during the scheme, according to the indictment.
If convicted, he faces up to 20 years in prison for the securities fraud charge as well as each of the 20 counts of wire fraud. The charges also carry a possible $250,000 maximum fine.
The FBI conducted the investigation. The Securities and Exchange Commission also provided information that assisted in the overall investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Lebanon Sex Offender Indicted for Child PornographyRead the Press Release
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that a Lebanon, Mo., sex offender has been indicted by a federal grand jury for receiving and distributing child pornography over the Internet.
George Wayne Scott, 62, of Lebanon, was charged in an indictment returned by a federal grand jury on Tuesday, Dec. 12, 2017.
The federal indictment alleges that Scott received and distributed child pornography over the Internet on Feb. 28, 2017.
Scott has prior felony convictions for crossing state lines to engage in illicit sexual activity with a minor, transporting a minor across state lines for illicit sexual activity, coercion and enticement, receiving and distributing child pornography and possessing child pornography. Due to his status as a convicted sex offender, the indictment carries a mandatory minimum penalty of 15 years in federal prison without parole upon conviction.
Larson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt.This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Missouri State Highway Patrol, the Lebanon, Mo., Police Department and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
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."
Last Member of Taos County-Based Drug Trafficking and Money Laundering Ring Pleads GuiltyRead the Press Release
ALBUQUERQUE – Jason Duran, 43, of Albuquerque, N.M., pled guilty yesterday afternoon in federal court in Santa Fe, N.M., to a drug trafficking charge as the result of a 15-month DEA-led multi-agency investigation into a Taos County-based drug trafficking organization led by Ivan Romero, 41, of El Prado, N.M. Under the terms of his plea agreement, Duran will be sentenced to a maximum of 100 months in federal prison followed by a term of supervised release to be determined by the court.
Duran, Ivan Romero and six co-defendants initially were charged with methamphetamine trafficking, heroin trafficking and money laundering offenses in an eight-count indictment filed in Dec. 2015. The indictment was superseded in Feb. 2016 to add a ninth defendant, Elena Carabajal, 27, of El Prado, and five additional charges. The superseding indictment charged Ivan Romero, Duran and his seven co-defendants with conspiring to distribute heroin and methamphetamine from at least June 2012 through Dec. 2015. It also charged Ivan Romero, Ricco Romero, 28, of Taos, Melissa Romero, 38, of El Prado, and Wilma Romero, 67, of Taos, with conspiring to launder heroin trafficking proceeds. The superseding indictment also included substantive heroin trafficking charges against specific defendants as well as provisions seeking forfeiture to the United States of any and all assets and property derived, either directly or indirectly, from proceeds obtained from the criminal activities charged.
During yesterday’s proceedings, Duran pled guilty to an information charging him conspiracy to possess heroin with intent to distribute. In entering the guilty plea, Duran admitted that he conspired with others to distribute heroin in Taos County from 2012 through 2015. As part of the conspiracy, Duran admitted that he purchased bulk quantities of heroin from heroin suppliers in Bernalillo County, N.M., then transported the heroin to Taos County where it was sold and distributed by other individuals. Duran further admitted that after the heroin was sold, he transported the cash proceeds from the sale of heroin in Taos County back to the suppliers in Bernalillo County. Duran remains in custody pending a sentencing hearing which has yet to be scheduled.
Duran’s codefendants have all entered guilty pleas, and the following five have been sentenced:
- Nicholas Baca, 31, of Cerro, N.M., pled guilty in Feb. 2017, to participating in a heroin trafficking conspiracy, and was sentenced on June 14, 2017, to time served followed by five years of supervised release;
- Juanita Romero, 36, of Chamisa, N.M., pled guilty in Feb. 2017, to participating in a heroin trafficking conspiracy, and was sentenced on June 14, 2017, to time served followed by five years of supervised release;
- Melissa Romero pled guilty in Dec. 2016, to participating in the money laundering conspiracy, and was sentenced on June 14, 2017, to three years of probation;
- Elena Carabajal pled guilty in Jan. 2017, to possession of heroin with intent to distribute, and was sentenced on June 13, 2017, to a year and a day in prison followed by five years of supervised release; and
- Wilma Romero, pled guilty in Jan. 2017, to participating in the money laundering conspiracy and possessing heroin with intent to distribute, and was sentenced on Nov. 9, 2017 to 24 months in prison followed by five years of supervised release.
The following three defendants remain in custody pending sentencing hearings:
- Tyler Baker, 36, of Albuquerque, N.M., pled guilty in Oct. 2016 to participating in the heroin trafficking conspiracy;
- Ivan Romero pled guilty in Dec. 2016, to participating in a heroin trafficking conspiracy and a money laundering conspiracy. Under the terms of his plea agreement, Ivan Romero will be sentenced to a prison term within the range of 120 to 144 months; and
- Ricco Romero, pled guilty in Dec. 2016, to participating in the heroin trafficking conspiracy and the money laundering conspiracy, and to possessing firearms in furtherance of his drug trafficking activities. Under the terms of his plea agreement, Ricco Romero will be sentenced to a 120-month prison term.
Under the terms of their plea agreements, the defendants to this case are required to forfeit $431,870 in heroin proceeds and firearms to the United States.
According to the admissions contained in the plea agreements of the defendants who have entered guilty pleas as well as other court filings, Ivan Romero was the leader of a heroin trafficking organization based in Taos County. Ivan Romero and his brother Ricco Romero were responsible for purchasing quantities of heroin from suppliers in Albuquerque and Los Lunas, N.M. Other members of the organization acted as couriers and regularly transported large quantities of heroin to Ivan Romero and Ricco Romero in Taos County. Upon receiving the bulk heroin, Ivan Romero and Ricco Romero prepared the heroin for distribution by mixing or “cutting” it with other substances, repackaged it in smaller portions, and distributed it both directly and through a network of other drug dealers. Juanita Romero was one such dealer who distributed heroin in and around Penasco.
In April 2015, law enforcement officers executed a state search warrant at Ivan Romero’s residence where they seized drug paraphernalia, 461 grams of marijuana, 30 grams of hashish, more than 300 grams of heroin and $64,920 in cash. Ivan Romero was arrested on state charges that day, and Ricco Romero subsequently assumed a greater managerial role in the heroin trafficking organization at that time.
Following Ivan Romero’s arrest on April 2, 2015, a state court set his bond at $90,000. Wilma Romero, Ricco Romero and Melissa Romero conspired to launder $90,000 in heroin proceeds to post that bond and secure Ivan Romero’s release from state custody. Ivan Romero soon violated the conditions of his release, was remanded back to state custody and a second bond was set at $150,000. In May 2015, Wilma Romero, Ricco Romero and Melissa Romero again conspired to launder an additional $150,000 in heroin proceeds to post that bond
On June 29, 2015, law enforcement agents executed a federal search warrant at Wilma Romero’s residence. In the course of that search, agents seized approximately 97.5 grams of heroin, a small amount of marijuana, drug paraphernalia, $73,288 and gold coins.
On Nov. 17, 2015 and Dec. 1, 2015, Ricco Romero distributed heroin to an individual working with law enforcement agents. Thereafter, on Dec. 18, 2015, law enforcement agents obtained and executed a federal search warrant at Ricco Romero and Carabajal’s residence and at another residence as well as at another residence where Ricco Romero and Carabajal maintained a safe. During those searches, agents seized 96.8 grams of heroin, $70,562 in cash, and two firearms.
The investigation leading to the indictment was conducted by the Albuquerque office of the DEA, the HIDTA Region III Drug Task Force, New Mexico State Police, Taos Police Department, Taos County Sheriff’s Office and the Bureau of Alcohol Tobacco, Firearms and Explosives.
Assistant U.S. Attorney Timothy S. Vasquez is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Kirtland woman indicted for her role in a group that stole mail in Lake CountyRead the Press Release
A federal grand jury returned a two-count indictment charging a Kirtland woman for her role in a group that stole mail in Lake County, said U.S. Attorney Justin E. Herdman, United States Attorney for the Northern District of Ohio.
Corey Lauren Whalen, 18, was indicted on one count of aiding and abetting the theft of mail and one count of possessing stolen mail.
Whalen aided others in stealing a package in Painesville on Nov. 27 and a letter in Mentor on Dec. 5, according to the indictment.
The case remains under investigation.
“People should be vigilant about collecting their mail and packages, particularly during the holidays,” Herdman said. “Customers are reminded not to send cash through the mail, use a secure mailbox and consider using security cameras.”
“While mail theft is at a very low rate in the Cleveland area, Postal Inspectors work aggressively with local agencies to combat any reports of mail theft. The Postal Service is always a very safe and secure way of conducting commerce” said Tommy Coke, Inspector in Charge, Pittsburgh Division.
Mentor Police Chief Kevin Knight said: “Hopefully the charges send a clear message to those who think they can just go around and steal other people’s property that they worked so hard to get.”
“This case was solved when a good neighbor called in, which is what it’s all about, and a lot of cooperation among law enforcement agencies,” said Lake County Sheriff Daniel A. Dunlap.
Assistant United States Attorney Elliot Morrison is prosecuting the case following an investigation by the U.S. Postal Inspection Service, the Lake County Sherriff’s Office, the Mentor Police Department, and the Painesville Police Department.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial, in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Jury Convicts Columbus Man for Trafficking Crack, CocaineRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Deandre Forrest, 39, of Columbus, of seven counts related to the distribution of cocaine and crack and one count of possessing a firearm in furtherance of a drug trafficking crime.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Columbus Police Chief Kim Jacobs announced the verdict reached today following a three-day trial before Senior U.S. District Judge James L. Graham.
According to court documents and testimony, from October 2016 until June 2017, Forrest conspired to distribute 280 grams or more of crack cocaine and cocaine. Forrest also possessed three revolvers and two pistols, which were used in furtherance of the drug trafficking.
Conspiracy to distribute more than 280 grams or more of crack, and actual distribution of that amount of the drug, are each crimes punishable by 10 years to life in prison.
Distributing cocaine and possessing cocaine with the intent to distribute it are each crimes punishable by up to 20 years in prison.
Using a firearm in furtherance of a drug trafficking crime carries a mandatory five-year sentence up to life in prison, to be served consecutively to any other sentence.
U.S. Attorney Glassman commended the cooperative investigation by the ATF and Columbus Division of Police, as well as Assistant United States Attorneys David M. DeVillers and Noah R. Litton, who are representing the United States in this case.
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Jackson Man Pleads Guilty to Illegally Possessing a Firearm by a Convicted FelonRead the Press Release
Jackson, Miss. – Michael Ervin a/k/a Michael Irving of Jackson, Mississippi, pled guilty Tuesday, December 12, 2017, before U.S. District Judge Daniel P. Jordan III, to possession of a firearm by a convicted felon, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On July 13, 2017, while attempting to execute an arrest warrant, the Gulf Coast Regional Fugitive Taskforce discovered multiple firearms in the possession of Michael Ervin at a residence in Jackson. During that search, officers recovered two handguns, two semi-automatic rifles, eight magazines (six loaded), and approximately 150 rounds of ammunition.
Ervin was previously convicted in the First Judicial District of Hinds County for possession of cocaine and for possession of ammunition by a convicted felon.
He will be sentenced by U.S. District Judge Daniel P. Jordan III on March 12, 2018, and faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Gulf Coast Regional Fugitive Taskforce. It is being prosecuted by Assistant U.S. Attorney Keesha D. Middleton.
Irving Woman Admits to $1 Million Ponzi SchemeRead the Press Release
DALLAS —Nemelee Liwanag Jiao, 47, of Irving, Texas, pleaded guilty today, before U.S. Magistrate Judge Renee Harris Toliver, to orchestrating a Ponzi scheme that cost at least 35 investors more than $1,000,000, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Jiao pleaded guilty to one count of wire fraud. She faces a maximum statutory penalty for wire fraud is 20 years in federal prison and a $250,000 fine. Jiao will remain on bond pending her sentencing, which is scheduled for April 4, 2018.
According to the plea agreement factual resume, beginning in February 2009 and continuing through September 2016, Jiao devised a scheme to cause individuals to invest in promissory notes purportedly issued by Shepherd’s Light Learning Center and Lord of Peace Learning Center, two non-profit schools located in the Philippines, but instead used the invested funds for her personal benefit. Jiao raised at least $1,000,000 from at least 35 investors.
Specifically, Jiao represented to investors that she was a representative of Shepherd’s Light and Lord of Peace and entered into investment contracts, also known as promissory notes, with investors falsely promising rates of return of 10% to 100% on investments. Jiao also promised repayment of principle and interest resulting from the investment within 30 days to one year following the investment. Many of the investment contracts were notarized to make the investments appear legitimate. Jiao then directed investors to write checks and wire funds to bank accounts controlled by her. Jiao used the investors’ funds for her own benefit, including a country club membership and personal expenses.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Mary Walters is in charge of the prosecution.
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Irvin Mayfield and Ronald Markham Indicted for Defrauding New Orleans Public Library FoundationRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that IRVIN MAYFIELD, age 40, and RONALD MARKHAM, age 39, both residents of New Orleans, were charged today by a federal grand jury in a 19 Count Indictment for Conspiracy, Wire Fraud, Mail Fraud, Money Laundering, and Obstruction of Justice.
According to court documents, MAYFIELD founded the New Orleans Jazz Orchestra (NOJO) in 2002. MAYFIELD acted as NOJO’s Artistic Director and featured performer. MARKHAM, a long-time friend of MAYFIELD, served as NOJO’s President and CEO. Both defendants received a $100,000 annual salary from NOJO. MAYFIELD also received income and other benefits through his companies Mayfield Production Company, Inc. and Mayfield Publishing Co., as well as through his affiliation with Irvin Mayfield’s Jazz Playhouse, a nightclub formerly in the French Quarter.
Between December 2008 and May 2010, NOJO relied heavily on grants from the Edward Wisner Donation, a charitable trust administered by the City of New Orleans, to pay its operating costs and expenses. In February 2011, support for NOJO through the Edward Wisner Donation was terminated by the City of New Orleans, causing great financial distress to NOJO and its ability to pay expenses. MAYFIELD and MARKHAM then began a search for new sources of funding.
In or about August 2006, MAYFIELD became a board member of New Orleans Public Library Foundation (NOPLF), later becoming Chairman of the Board in or about November 2010. During his time on the NOPLF Board, MAYFIELD also maintained his position with NOJO. In or about December 2009, MARKHAM also became a board member of NOPLF. He later became Chairman of the Board in or about September 2013 upon MAYFIELD’s resignation as Chairman of NOPLF. During his time on the NOPLF Board, MARKHAM also maintained his position with NOJO.
Between August 2011 and January 2013, MAYFIELD and MARKHAM caused approximately $1,382,971 to be transferred from the NOPLF investment account to unlawfully enrich themselves, pay the operating costs of NOJO without approval, and while misleading NOPLF and others with regard to the purpose of the transfers.
According to the Indictment, MAYFIELD and MARKHAM obstructed justice in November 2013 by altering and falsifying NOPLF Board of Director’s meeting minutes with the intent to impede, obstruct, and influence the federal investigation that had begun by that time.
The charges detail that MAYFIELD and MARKHAM used the NOPLF investment account funds to:
- purchase a 24k gold-plated trumpet for MAYFIELD;
- fund MAYFIELD and MARKHAM’s NOJO salaries;
- make payments into MAYFIELD’s personal bank accounts;
- make payments to Mayfield Productions;
- fund NOJO’s performance at Carnegie Hall;
- pay for stays at the Ritz Carlton and Park Central Hotel;
- fund expenditures made by MAYFIELD at Saks Fifth Avenue and Harrah’s Casino, and
- pay for the general operating expenses of NOJO.
If convicted, the defendants face five years of imprisonment as to Count 1, 20 years of imprisonment as to Counts 2 through 6, ten years of imprisonment as to Counts 7 through 18, and 20 years imprisonment as to Count 19. All counts also carry a possible $250,000 fine.
Acting U.S. Attorney Duane Evans reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
Acting U.S. Attorney Evans praised the work of the Federal Bureau of Investigation and the New Orleans Inspector General’s Office, and thanked the Metropolitan Crime Commission for their assistance. The case is being prosecuted by Assistant U.S. Attorneys G. Dall Kammer, Deputy Chief of the Fraud Unit, Brandon Long, and Hayden Brockett.
Inland Empire Man Faces Federal Child Exploitation Charges after Posting Internet Ad and Offering Sex Tutor Services to 12 Year OldRead the Press Release
RIVERSIDE, California – A San Bernardino County man faces federal sex trafficking charges after he allegedly posted an advertisement on Craigslist that offered “sexual tutoring” to females of any age and later agreed to provide “training” to a 12-year-old girl.
Jacob Aaron Schaffran, a 20-year-old resident of Highland, was named in a two-count indictment returned yesterday by a federal grand jury. The indictment charges Schaffran with attempted sex trafficking of a child and use of the internet to attempt to induce a minor to engage in criminal sexual activity.
Schaffran was arrested in this case on December 5 after he arrived at a Riverside fast food restaurant to meet the mother of the purported 12-year-old. The “mother” was an undercover law enforcement officer who had engaged in a series of email, text and phone communications with Schaffran. According to court documents, Schaffran repeatedly said that he wanted to meet with the girl and explained in detail how he wanted to engage in sexual activity with the 12-year-old girl.
The investigation in this case started in mid-November when the National Center for Missing and Exploited Children sent a tip to the Riverside County District Attorney’s Office about a posting on Craigslist that sought females of any age he could “teach about sex.”
The investigation quickly uncovered the online ad with the heading “Sex Lesson, Sexual Tutoring, Sex Training, Sexual Education, Sex ed,” and specifically stated, “Age is not an issue however young or old I just like to know because each age and experience group should be handled a little bit differently.”
In late November, a law enforcement official responded to the ad and started a series of communications with a person later identified as Schaffran. The law enforcement officer assumed the persona of the mother of a fictional 12-year-old girl named “Robin.”
In the communications, Schaffran allegedly agreed to have sex with the girl in exchange for $100, explaining to the undercover officer that he previously had taught two other girls and that the 12-year-old girl’s lack of prior sexual experience did not pose a problem.
On December 5, Schaffran made final plans to meet with the undercover officer and agreed to bring condoms and a rose for the child. After meeting with the purported mother, reiterating his intention to have sex with the 12-year-old and receiving payment of $105, authorities took Schaffran into custody.
Schaffran was initially charged in a criminal complaint filed in federal court. During his first court appearance on December 6, he was ordered released on a $115,000 bond.
Schaffran is scheduled to be arraigned on the indictment on January 3.
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.
If he were to be convicted, Schaffran would face a potential sentence of life in federal prison. The charge of attempted sex trafficking of a child carries a mandatory minimum sentence of 15 years in prison. The charge of attempted enticement of a minor carries a mandatory minimum sentence of 10 years in federal prison.
The investigation in this case is being conducted by the FBI and the Riverside County District Attorney’s Office, Internet Crimes Against Children/Sexual Assault Felony Enforcement Team.
This case is being prosecuted by Special Assistant United States Attorney Teresa K.B. Beecham of the Riverside Branch Office.
Illegal Alien Convicted of Illegally Reentering Country for Second TimeRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal judge yesterday found Noe Blas-Jahuey (30, Mexico) guilty of illegal reentry of a deported alien. He faces a maximum penalty of 10 years in federal prison. A sentencing hearing is scheduled for March 9, 2018.
Blas-Jahuey was indicted on May 19, 2016.
According to testimony and evidence presented at trial, Blas-Jahuey was deported twice, once in August 2013, and again in December 2013. He reentered the United States illegally after his December 2013 deportation without receiving permission to return. Immigration authorities found Blas-Jahuey in the United States after he was arrested by local law-enforcement officers in Pinellas County for aggravated assault. He has a prior conviction for illegal reentry into the United States.
This case was investigated by U.S. Immigration and Customs Enforcement's Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
I.T. Specialist Arrested for Allegedly Hacking into Servers of North Suburban Company Where He Formerly Worked as ContractorRead the Press Release
CHICAGO — An information technology specialist has been arrested on cyber hacking charges for allegedly damaging the servers of a north suburban company where he formerly worked as a contractor.
EDWARD SOYBEL illegally accessed the servers of Lake Forest-based W.W. Grainger Inc., on multiple occasions last year, according to an indictment returned Tuesday in federal court in Chicago. Soybel intentionally caused damage to Grainger’s automated inventory management program, which operates on-site dispensing machines and has approximately 18,000 customers throughout the United States, the indictment states. The dispensing machines provide customers with secure access to durable products, such as safety equipment. Soybel had worked as a technical support contractor at Grainger’s facility in Niles until he was terminated in early 2016.
The indictment charges Soybel, 34, of Chicago, with ten counts of intentionally causing damage to protected computers, one count of attempting to cause damage to protected computers, and one count of attempting to access a protected computer without authorization.
Soybel was arrested Wednesday morning and he remains in federal custody. He pleaded not guilty to the charges during a Wednesday afternoon arraignment before U.S. District Judge Matthew F. Kennelly in Chicago. A status hearing is set for 1:30 p.m. today before Judge Kennelly.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
According to the indictment, Grainger maintained computer servers related to the dispensing machines at its facility in Niles. Soybel worked at the facility as a contractor from November 2014 to February 2016, after which his access to Grainger’s servers was deactivated. Soybel hacked into the servers on several occasions in July 2016, the indictment states.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Intentionally causing damage to protected computers and attempting to cause damage are each punishable by up to ten years in prison, while attempting to access a protected computer without authorization is punishable by up to one year. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Nicholas J. Eichenseer.
Houston Men Sentenced in East Texas Gas Pump Skimmer CasesRead the Press Release
TYLER, Texas – Two Houston men were sentenced today in separate cases for their involvement with gas pump skimmers, announced Acting U.S. Attorney Brit Featherston. A skimmer is a device capable of reading and recording account information, including customer names, account numbers, and personal identification numbers, from credit and debit cards.
“These devices victimize individual cardholders as well as the issuing financial institutions,” said Acting U.S. Attorney Brit Featherston. “The United States Attorney’s Office for the Eastern District of Texas will continue to partner with federal, state, and local law enforcement to combat this threat.”
On June 22, 2017, Dennys Miguel Arias Gonzalez, 46, of Houston, was indicted along with Tomas Falcon Casanova for violations related to their possession of skimmers and stolen account information. On September 5, 2017, Gonzalez pleaded guilty to possession of counterfeit and unauthorized access devices. Today, he was sentenced by U.S. District Judge Ron Clark to 11 months in custody. Casanova has also pleaded guilty and awaits sentencing. He faces a term of imprisonment for up to 10 years.
According to information presented in court, Gonzalez and Casanova were traveling together in Smith County, Texas, when they were found to be in possession of multiple skimmers, counterfeit credit cards, and a laptop computer, containing stolen credit and debit card account information.
On June 22, 2017, Beniurkis Hernandez Rodriguez, 31, of Houston, was indicted along with Tamara Valle for violations related to their use and possession of skimmers and stolen credit and debit card information. On Sep. 5, 2017, Rodriguez pleaded guilty to possession of counterfeit and unauthorized access devices. Today, he was sentenced by U.S. District Judge Ron Clark to 10 months’ imprisonment. Valle has also pleaded guilty and was sentenced last week to approximately 10 months’ imprisonment. Upon release from confinement, Rodriguez and Valle are required to surrender to immigration officials for deportation proceedings.
According to information presented in court, Rodriguez and Valle had traveled together to a gas station in Longview, Texas, to retrieve two skimmers from pump terminals that had been installed for the purpose of stealing customer account information. Stolen account data was then downloaded onto a laptop computer that was recovered from their vehicle.
These matters were investigated by the U.S. Secret Service, the Smith County Sheriff’s Office, the Longview Police Department, the Overton Police Department, and the Tyler Police Department. The cases were prosecuted by Assistant U.S. Attorneys Frank Coan and Nathaniel Kummerfeld.
Hollywood Resident Sentenced for Access Device Fraud and Aggravated Identity TheftRead the Press Release
A Hollywood resident was sentenced yesterday to 24 months imprisonment for access device fraud and aggravated identity theft.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (ICE-HSI), and Dexter M. Williams, Chief, Miramar Police Department, made the announcement.
Frantz Felix, Jr., 23, of Hollywood, was convicted at trial of one count of use of one or more unauthorized access devices to obtain anything of value aggregating $1,000 or more, in violation of Title 18, United States Code, Section 1029(a)(2), and one count of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1).
The evidence at trial established that between September 20, 2012 and September 24, 2012, Felix used a fraudulent credit card to obtain more than $5,000 in merchandise from vendors in Miami-Dade County.
Mr. Greenberg commended the investigative efforts of ICE-HSI and the Miramar Police Department. The case was prosecuted by Assistant United States Attorneys Yeney Hernandez and Joshua Rothstein.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Guatemalan National Sentenced for Illegal Reentry After DeportationRead the Press Release
BOSTON - A Guatemalan national was sentenced yesterday in federal court in Boston for illegally reentering the United States after being deported.
Elmer Noe Esquivel-Mendoza, 34, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to six months in prison and one year of supervised release. Esquivel-Mendoza will face deportation proceedings upon completion of his sentence. In October 2017, Esquivel-Mendoza pleaded guilty to one count of unlawful reentry of a deported alien.
Esquivel-Mendoza was previously deported on May 20, 2013. In January 2017, law enforcement officers in Boston encountered Esquivel-Mendoza and determined him to be illegally present in the United States.
Acting United States Attorney William D. Weinreb and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit prosecuted the case.
Greenville Drug Trafficker SentencedRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that in federal court today, United States Chief District James C. Dever III sentenced RICHARD LENZY, 41, from Greenville, NC, to 100 months in prison for conspiracy to distribute 500 grams or more of cocaine and a quantity of cocaine base (crack) and possession of a firearm by a convicted felon. LENZY will be supervised for 4 years upon his release from the Bureau of Prisons.
On November 5, 2013, the Greenville Regional Drug Task Force used a confidential informant to buy 22.48 grams of crack cocaine from two other drug traffickers in Greenville. Officers saw the two other traffickers meet with LENZY at a convenience store prior to the purchase during which LENZY supplied the crack cocaine. On the same date, officers received consent from LENZY’S girlfriend to search their residence. During the search, officers seized 67.23 grams of cocaine, a loaded .45 caliber handgun, and $1,500. After his arrest, LENZY admitted to buying 4.5 ounces of cocaine three times and 5 ounces of cocaine once. LENZY also admitted to converting an ounce of the cocaine into crack cocaine that was sold to the informant.
On June 23, 2015, LENZY sold 3.4 grams of cocaine to a confidential informant working at the direction of the Greenville Regional Drug Task Force. On July 8, 2015, LENZY sold 13.9 grams of cocaine to the informant. On the same date, the Pitt County Sheriff’s Office obtained and executed a search warrant for LENZY’S motel room in Greenville. During the search of the motel room, deputies seized 10 grams of crack cocaine, 158 grams of marijuana and 25 pills of Desoxyn (methamphetamine), $7,972.31, a loaded 9mm handgun, digital scales and drug paraphernalia. LENZY is prohibited from possessing a firearm due to his 1998 conviction for second-degree murder.
The investigation was conducted by the Greenville Regional Drug Task Force, the Pitt County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Special Assistant United States Attorney Glenn Perry handled the prosecution. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office, pursuant to funding provided by the North Carolina Conference of District Attorneys, to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
Granby Man Convicted of Sexually Exploiting Five ChildrenRead the Press Release
SYRACUSE, NEW YORK – Following a four-day trial in federal court in Syracuse, a jury today found Clif J. Seaway, age 61, of Granby, New York, guilty of two counts of Conspiracy to Sexually Exploit a Child and ten counts of Sexual Exploitation of a Child, announced Acting United States Attorney Grant C. Jaquith, New York State Police Superintendent George P. Beach II, and Kevin M. Kelly, Special Agent in Charge of the Buffalo Division of Homeland Security Investigations.
The evidence at trial established that Clif J. Seaway conspired with others to, and did sexually exploit, five minor children from 2001 through 2013 in Oswego, Onondaga, and Jefferson Counties, and took sexually explicit photos and videos of the victims. During the trial the jury viewed numerous videos and photographs made by the defendant of his sexual exploitation of all five victims and heard testimony from one, who is now an adult. The trial evidence also included the defendant’s recorded confession to New York State Police Investigators.
“The jury heard testimony about the defendant’s abhorrent, prolonged sexual exploitation of five minor victims over many years and rendered a verdict that will hold the defendant accountable for his heinous criminal conduct. With our law enforcement partners, we will continue to investigate and prosecute such unfathomable crimes against the most vulnerable and helpless among us – children -- to the fullest extent of the law,” said Acting U.S. Attorney Grant C. Jaquith.
New York State Police Superintendent George P. Beach said, “While these type of investigations are difficult for those who have worked the most shocking of cases, the evidence gathered and work done by the State Police and our law enforcement partners, led to this conviction and ensures the defendant will serve time for his deplorable crimes. Together, we will continue to seek justice for those who have been victimized and protect those who are most vulnerable, our children.”
"Today's conviction is a critical first step toward healing for all of those impacted by the depraved acts perpetrated by this defendant," said Kevin Kelly, Special Agent in Charge of Homeland Security Investigations, Buffalo Division. "HSI will continue to aggressively pursue those who prey on the most vulnerable in society, our children."
Sentencing is scheduled for April 30, 2018 in Syracuse. The defendant faces a minimum sentence of 15 years and up to 30 years for each count of conviction, for a maximum possible sentence of 360 years in prison. The defendant will also be sentenced to serve a term of supervised release of at least five years and up to life if released from imprisonment and will be required to register as a sex offender. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the New York State Police and Homeland Security Investigations with assistance provided by the Onondaga County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Lisa Fletcher, Project Safe Childhood Coordinator for the Northern District of New York, and Assistant United States Attorney Carina Schoenberger.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
German Citizen Sentenced to Life in Prison for Attempting to Engage A Minor in Sexual ActivityRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron yesterday sentenced Meinrad Kopp (55), a German citizen and resident of Switzerland, to life in federal prison and a life term of supervision for attempting to entice a minor to engage in sexual activity. The Court also imposed a special assessment of $5,000, and ordered him to pay a fine of $250,000 and forfeit a cellphone, laptop computer, and camera that had been used to facilitate the offense.
Kopp entered a guilty plea on September 22, 2017.
According to court documents, from on or about April 26, 2017, to on or about June 16, 2017, Kopp engaged in communications via the Internet, with an undercover agent, about engaging a minor in a range of sadistic sexual activities. Kopp disclosed his intent to humiliate and inflict severe pain on the child for his sexual gratification by treating her like a dog and torturing her with certain instruments he intended to bring with him. According to Kopp, he previously had beaten an 11-year-old child using a leather belt.
On June 16, 2017, Kopp traveled to Orlando and was arrested by agents working with Homeland Security Investigations. Inside his luggage, Kopp had weights, clamps, rope, tape, a bottlebrush, and a flashlight that he intended to use with the minor. He had a digital camera that he intended to use to record the acts with the child. During an interview with agents, Kopp admitted that he had traveled to Orlando for the purpose of engaging a minor in sexual activity.
At sentencing, Judge Byron remarked that this was a heinous and atrocious crime, and noted that he could not imagine anything more extreme than hurting a child for an individual’s sexual gratification. He also noted that the sentence imposed was intended to deter sex tourism.
"Crimes against children are some of the most loathsome our HSI special agents investigate," said HSI Tampa Special Agent in Charge James C. Spero. "This case should serve as warning to other child predators. We will find you, arrest you and make sure that you are prosecuted to the fullest extent of the law."
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Brevard County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc .
Gary Man Convicted During 3-Day Jury TrialRead the Press Release
HAMMOND – The United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Artez Brewer, age 30, of Gary, Indiana was convicted of 3 counts of bank robbery, after a three-day jury trial before District Court Senior Judge Joseph S. Van Bokkelen.
According to evidence presented in this case, April 28, 2016 Brewer and his accomplice robbed Centier Bank in Griffith, Indiana. On May 6, 2016, Brewer and his accomplice robbed Main Source Bank in Crown Point, Indiana and on May 27, 2017 Brewer and his accomplice robbed Horizon Bank in Whiting, Indiana.
This case was the result of an investigation by the Federal Bureau of Investigation with the assistance of the Crown Point, Hammond and Whiting Police Departments. This case was prosecuted by Assistant United States Attorneys Jennifer Chang and Thomas McGrath.
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Gang Member Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
Gulfport, Miss. – John Wayne Clark, 32, of Biloxi, Mississippi, pled guilty, before U.S. District Judge Sul Ozerden, to an indictment charging him with possession of a firearm by a convicted felon, announced U.S. Attorney Mike Hurst. Clark is a documented Simon City Royal gang member.
On May 7, 2015, the Drug Enforcement Administration received a tip that Clark would be transporting methamphetamine. When Clark was pulled over and his car was searched, law enforcement agencies found methamphetamine and a gun, which was hidden in the engine compartment. In April 2016, Clark entered guilty pleas on two previous state drug charges and is currently serving a three-year state sentence.
Clark will be sentenced by U.S. District Judge Sul Ozerden on March 22, 2018, and faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives along with the Drug Enforcement Administration as part of a violent crime initiative. The case is being prosecuted by Assistant U.S. Attorney Annette Williams.
Ft. Lauderdale Resident Sentenced for Bank Fraud and Aggravated Identity TheftRead the Press Release
Teresa Thompson, 59, of Fort Lauderdale, was sentenced to 32 months imprisonment, for conspiracy to commit bank fraud, bank fraud, and aggravated identity theft.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (ICE-HSI), and W. Howard Harrison, Chief, Plantation Police Department, made the announcement.
Teresa Thompson was convicted at trial of one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349, four counts of bank fraud, in violation of Title 18, United States Code, Section 1344, and one count of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1).
The evidence at trial established that between October 24, 2016 and November 29, 2016, Thompson signed and deposited over $28,000 in stolen checks into her TD Bank account. Thompson received the checks from co-conspirator Thomas Lee Souffrant, who stole the checks from mailboxes in Plantation and Fort Lauderdale, Florida.
Mr. Greenberg commended the investigative efforts of ICE-HSI and the Plantation Police Department. The case was prosecuted by Assistant United States Attorneys Joshua S. Rothstein and David Turken.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Fraudsters Sentenced in Second Chance Lending SchemeRead the Press Release
McALLEN, Texas – Three men have been ordered to prison following their convictions related to a “second chance” mortgage lending scheme, announced Acting U.S. Attorney Abe Martinez. A federal jury convicted Luis Antonio Rodriguez, 37, of Mission, and Rogelio Ramos Jr., 37, of Pharr, of conspiracy to commit wire fraud late Friday, May 26, following a seven-day-trial and approximately nine hours of deliberation. Also sentenced today was another co-conspirator - Guadalupe Artemio Gomez, 32, of Mission – who had pleaded guilty prior to trial.
Today, U.S. District Judge Randy Crane ordered Rodriguez to serve a total of 13 years in federal prison, while Ramos received a 90-month term of imprisonment. Gomez received a four-year sentence. At the hearing, the court heard from all three defendants as well as numerous victims who provided testimony that described the substantial harm they and their families suffered as a result of the fraud. The three men were further ordered to serve five years of supervised release and ordered to pay $1,858, 997.75 in restitution to the victims of the scheme.
All three were accused of operating a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The investigation revealed Gomez, Rodriguez and Ramos conducted business in McAllen, Mission, Edinburg, Houston and San Antonio by hiring recruiters to funnel prospective home buyers to Infinite Properties. The homebuyers then gave 10 percent of the purchase price as a down payment to Infinite Properties.
During trial, the jury heard from victims, law enforcement and an FBI forensic accountant who testified that instead of using the down payments as intended, the money was used for personal expenses, trips to Las Vegas and to purchase other real estate.
Gomez testified at trial against Rodriguez and Ramos stating the two men received more than $1 million in the mortgage scheme in 2016.
The defense claimed they had no intent to defraud the victims because they had attempted to get a $10 million loan. The jury was not convinced and found both men guilty as charged.
Previously released on bond, the three men were taken into custody following the sentencing today where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI, Texas Department of Insurance and police departments in McAllen, Mission and Edinburg conducted the investigation.
Assistant U.S. Attorneys Robert L. Guerra Jr. and Andrew Swartz prosecuted the case.
Four Michigan Men Indicted on Federal Charges in Connection with Jared the Galleria of Jewelry RobberyRead the Press Release
St. Louis, MO – Four individuals from Michigan were indicted today for their part in the robbery of Jared the Galleria of Jewelry on Monday, December 4, 2017.
Tyran Gray, 20; Xavier Grove, 33; Darrell Lee, 20; and Robert Scott, 29, were each indicted by a federal grand jury on one felony count each of robbery which interfered with interstate commerce, following a criminal complaint filed on December 5.
According to court records, the four named defendants entered Jared the Galleria of Jewelry, located at 21 The Boulevard, Richmond Heights, Missouri. One held the door open while the others smashed the glass cases, taking loose diamonds and watches in the presence of employees of Jared’s. The defendants ran out of the store on foot and fled the scene. Due to an unrelated incident, there were several police officers in the area at the time of the robbery and they pursued the defendants who were later arrested and the stolen property recovered.
The robbery charge carries a maximum penalty of 20 years in prison and/or fines up $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case is being investigated by the Richmond Heights Police Department and Federal Bureau of Investigation. Assistant United States Attorney John Ware is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Former Washington County Ambulance District Administrator and Wife Indicted on Federal Fraud ChargesRead the Press Release
St. Louis, MO – The former Administrator for the Washington County Ambulance District, William Gum, a/k/a “Mal” and his wife, Charlena Gum, a/k/a “Charli”, who also was an employee of district, were indicted on charges involving stealing from the District, an agency that receives Federal program benefits.
According to the indictment, William “Mal” Gum was the Administrator for the Washington County Ambulance District, an agency that receives more than $10,000 of Medicare program benefits each year. Mal Gum’s salary was set by the Board of the District. The indictment alleges that between 2012 and 2016, Mal Gum paid himself a salary that was higher than the salary authorized by the Board and that he used District funds to pay for health insurance for his dependents without authorization. Mal Gum is charged with stealing at least $5,000 a year from the District between 2012 and 2016.
Additionally, the indictment alleges that Charlena “Charli” Gum and Mal Gum used District credit cards to purchase personal items. Between September 1, 2014 and November 29, 2014 Charli and Mal Gum used the District credit card to purchase more than 30 gift cards in denominations of $50 and $100, music CDs, undergarments, clothing, and other personal items and groceries. According to the indictment, Mal Gum received itemized bills for the fraudulent purchases and paid the bills from the District bank account.
William Gum, 58, Potosi, MO, was indicted by a federal grand jury on five felony counts of federal program theft, one count of conspiracy to commit access device fraud, and one felony count of access device fraud.
Charlena Gum, 43, Potosi, MO, was indicted by a federal grand jury on one felony count of federal program theft, one count of conspiracy to commit access device fraud, and one felony count of access device fraud.
If convicted, each count of federal program theft carries a maximum penalty of 10 years in prison and/or fines up to $250,000; conspiracy to commit access device fraud carries a maximum of five years in prison and/or fines up to $250,000; and access device fraud carries a maximum of ten years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Jefferson County Sheriff’s Office and the Federal Bureau of Investigation. Assistant United States Attorney Jeannette Graviss is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Former Union President and Treasurer Sentenced to Probation for Stealing Union FundsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on December 13, 2017, United States District Court Judge Richard P. Conaboy sentenced Michael Evans, age 57, and William Uggiano, age 60, both of Wilkes-Barre, Pennsylvania, for stealing funds from a local union.
According to United States Attorney David J. Freed, both Evans and Uggiano were sentenced to 2 years’ probation for stealing funds from the American Federation of Government Employees (AGFE) Local 1699 Union. Evans was ordered to pay $65,775 in restitution and Uggiano was ordered to pay $7,350 in restitution to the union.
Evans and Uggiano, served as the President and Treasurer respectively, stole more than $68,000 in union funds from Local 1699’s credit union between March 2013 and December 2015.
This case was investigated by the United States Department of Labor, Office of the Inspector General. Assistant United States Attorney Evan Gotlob prosecuted the case.
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Former Suzuki Employee Sentenced for Submitting False Report to EPARead the Press Release
Wayne Powell, a former employee of American Suzuki Motor Corporation headquartered in Brea, California, was sentenced today to one day in prison in federal court in Detroit for violating the Clean Air Act when he submitted a false end-of-year report to the U.S. Environmental Protection Agency, the Justice Department announced.
According to court records, Powell was a Government Relations Analyst for Suzuki and was responsible for submitting documents to EPA regarding Suzuki’s compliance with motorcycle emission standards. Powell submitted Suzuki’s 2012 application to EPA for a “certificate of conformity,” which allows a vehicle manufacturer to sell vehicles in the United States.
At the end of the model year, Suzuki was required to submit to EPA an end-of-year report to show that it was in compliance with emission standards. The first end-of-year report Powell submitted to EPA’s Office of Transportation and Air Quality in Ann Arbor in 2013 purported to claim “banked credits” to offset the excess emissions. However, because Suzuki had not participated in the banked credit program, it had no credits to use. EPA informed Powell it could not accept that report. Subsequently, on March 28, 2014, Powell submitted an amended end-of-year report to EPA in which he had altered the numbers of four motorcycle engine families, which resulted in a calculation that was within the emission limit. The altered numbers were false. Powell also falsely represented to EPA in the email that accompanied the amended report that “[t]he computer software that we use to gather this information did not count all of the units” and that he had “corrected some mistakes on the 2012 report.”
On Nov. 8, 2016, EPA announced that it had entered an administrative settlement with Suzuki Motor of America, Inc. and Suzuki Motor Corporation that resolved Clean Air Act violations for manufacturing, importing, and selling model year 2012 motorcycles that failed to meet the EPA average emission standard for the Suzuki on-highway motorcycle fleet, and for submitting falsified production reports based on incorrect motorcycle production volumes to demonstrate compliance with the emission standard. Suzuki agreed to pay a total civil penalty of $2,054,924.
Acting Assistant Attorney General Jeffrey H. Wood and Acting U.S. Attorney Daniel L. Lemisch thanked the U.S. Environmental Protection Agency’s Criminal Investigation Division, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the U.S. Postal Inspection Service for their work in this investigation. The case is being prosecuted by Senior Counsel Kris Dighe of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Craig Weier of the U.S. Attorney’s Office for the Eastern District of Michigan.
Former Massage Therapist Pleads Guilty to Sex Offenses for Incidents Involving ClientsRead the Press Release
WASHINGTON – Habtamu Gebreslassie, 24, a former massage therapist, pled guilty today to three sex offenses stemming from a series of incidents involving clients at two massage establishments in Northwest Washington, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Gebreslassie, of Silver Spring, Md., pled guilty in the Superior Court of the District of Columbia to first-degree sexual abuse of a patient or client, attempted first-degree sexual abuse of a patient or client, and misdemeanor sexual abuse. The plea, which is contingent upon the Court’s approval, calls for an agreed-upon prison sentence of 19 to 60 months, to be followed by three years of supervised release. Additionally, upon completion of his prison term, Gebreslassie will be required to register as a sex offender for the rest of his life.
The Honorable Lynn Leibovitz scheduled sentencing for Feb. 16, 2017.
According to a proffer of facts submitted at the plea hearing, all three victims were women who were getting massages from the defendant, who was licensed to practice massage therapy in the District of Columbia.
The first incident took place on June 21, 2017, at a massage establishment in the Dupont Circle area. That day, Gebreslassie engageed in unwanted sexual contact with a client. The second incident happened on Aug. 28, 2017, at another establishment in the Tenleytown area; there, Gebreslassie attempted to engage in a sexual act with a client. Finally, on Sept. 17, 2017, also at the Tenleytown location, Gebreslassie sexually abused a client.
Following the Sept. 17 incident, the victim contacted the Metropolitan Police Department. Gebreslassie was arrested later that day and has remained in custody ever since.
In announcing the plea, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department’s Second District and Sexual Assault Unit. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Victim/Witness Advocate Tracy Hawkins, Paralegal Specialist Tiffany Jones, and Assistant U.S. Attorneys Jocelyn Bond and J. Matt Williams, who investigated and prosecuted the case.
Former Director of OSU’s Multispectral Laboratories Charged with Multi-Million-Dollar FraudRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury has charged DANIEL WEBSTER "WEB" KEOGH, 47, and DANIELLE KEOGH, 36, both of Edmond, Oklahoma, with fraud crimes against First Pryority Bank, the U.S. Department of Agriculture, Commuter Air Technology, Inc., and Oklahoma State University’s Multispectral Laboratories, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to the 23-count indictment, Web Keogh was Chief Executive Officer of both EMB Energy, Inc., and Triton Scientific, LLC. The first ten counts of the indictment concern a $3.2 million loan to Triton from First Pryority Bank, which has offices in Tulsa and Pryor, Oklahoma. The indictment explains that in the fall of 2010, Web Keogh signed an agreement between EMB Energy and Lawrence Livermore National Security, LLC ("Livermore") concerning the development of new battery technology for electric utilities. Under the agreement, EMB Energy agreed to invest approximately $22 million in a collaborative project with Livermore. If Livermore and EMB Energy succeeded in building a small electromechanical battery prototype and scaling it to larger sizes, EMB Energy could own and commercialize a utility-sized battery.
To pursue this opportunity, Web Keogh, along with his wife Danielle Keogh, who was EMB Energy’s Senior Vice President of Finance, sought a $3.2 million loan to Triton from First Pryority Bank, secured by a battery to be purchased for $4 million. Several of the Keoghs’ statements to the bank, however, are alleged to have been false. In 2010, Web Keogh is alleged to have supported the loan application by claiming Triton would use the money to "purchase and install a significant piece of capital equipment for electrical storage." He also allegedly stated the loan would be for "equipment purchase only" and would support a project at Triton’s facility in Chilocco, Oklahoma. He later allegedly told the bank falsely that Triton had acquired the battery and substantially completed development of the battery. According to the indictment, Triton was engaging only in research and development—no battery prototype had been built, and no battery existed to serve as collateral. Furthermore, the indictment states battery research was to take place in California rather than at Chilocco. According to the indictment, identifying Chilocco as the location of the project qualified Triton for a loan guarantee by the U.S. Department of Agriculture’s Rural Development Administration, which supports the development of infrastructure in rural and economically depressed areas.
The indictment alleges Web and Danielle Keogh both made false statements in early 2011 when they gave the bank false invoices from EMB Energy to Triton to support the loan proceeds. In particular, these invoices made allegedly false references to a 2.0 MWh battery system, component parts, the shipment of items to Ponca City, Oklahoma, a purchase agreement between Triton and EMB Energy, and the battery’s contract value. The indictment states that EMB Energy, Triton, and Livermore never built a working electromechanical battery and that when Triton defaulted on the loan in December 2012, it owed more than $3 million to First Pryority and the U.S. Department of Agriculture. Web Keogh is charged by himself with making a false statement in a matter within the jurisdiction of the U.S. Department of Agriculture when he stated in loan closing documents that funds would be used to purchase machinery and equipment, rather than research and development.
Count 11 concerns a $2 million line of credit Triton had secured at First Pryority. The indictment alleges that Danielle Keogh made a false statement to First Pryority in May 2012, when she sought to renew this credit line. According to the indictment, she provided a financial statement and tax return that listed the battery as a fixed asset worth $4,172,979.64, when she knew Triton did not own a $4 million working battery and the battery concept was still in a pre-prototype stage of assembly.
Counts 12 through 23 concern the Keoghs’ dealings with Oklahoma State University—University Multispectral Laboratories, LLC (“OSU-UML”), a non-profit research center wholly owned by OSU that served the Department of Defense and other entities. In 2008, Triton became OSU-UML’s managing entity. Web Keogh served as OSU-UML’s Laboratory Director until he resigned in November 2012. Danielle Keogh is alleged to have represented herself as OSU-UML’s Director of Finance. The indictment explains that from 2010 to late 2012, OSU-UML served as prime contractor for projects by the United States Special Operations Command ("SOCOM"), including work by Commuter Air Technology, Inc. ("CAT") in war zones. The federal government paid OSU-UML for CAT’s work, and, according to the indictment, OSU-UML was supposed to forward the bulk of these funds to CAT.
According to the indictment, Web Keogh failed to use a substantial portion of the government’s payments to satisfy CAT’s subcontractor invoices. In particular, he allegedly transferred $1.675 million of OSU-UML funds in September 2012 to bank accounts in New York and Ohio based on instructions from an attorney at a Washington, D.C., law firm. The attorney allegedly promised these deposits would generate millions of dollars of "donations" for OSU-UML. The indictment states neither the Executive Director nor the Board of OSU-UML approved these transfers and that OSU-UML never recovered the funds. According to the indictment, Web and Danielle Keogh also directed OSU-UML staff to use money that should have gone to CAT for payments unrelated to SOCOM’s work, including hundreds of thousands of dollars related to EMB Energy’s battery project and more than $100,000 to support Danielle Keogh’s boutique dress shop, Liberté, in Oklahoma City.
If convicted of the bank-fraud conspiracy or making a false statement to a bank, the defendants could be imprisoned for a maximum of thirty years on each count, to be followed by up to five years of supervised release. Web Keogh could be sentenced to up to five years in prison and three years of supervised release for making a false statement in a matter within the jurisdiction of the U.S. Department of Agriculture. If convicted of the wire-fraud conspiracy relating to OSU-UML, the Keoghs could be imprisoned for a maximum of twenty years, to be followed by up to three years of supervised release. Web Keogh is charged with eight counts of wire fraud relating to OSU-UML; Danielle Keogh is also charged in three of these counts. Each count of wire fraud would carry the same penalty as the wire-fraud conspiracy. Web Keogh is also charged separately with three counts of embezzling from OSU-UML as an organization receiving federal funds, which would carry a maximum penalty of ten years in prison and three years of supervised release. Both defendants could be fined up to $1,000,000 on each of the banking crimes and up to $250,000 on each of the remaining counts. If convicted, they would also be required to pay restitution to victims.
The public is reminded these charges are merely accusations and that Web and Danielle Keogh are presumed innocent unless found guilty beyond a reasonable doubt by a unanimous jury.
This case is the result of an investigation by the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the U.S. Department of Agriculture—Office of Inspector General. Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson are prosecuting the case. Reference is made to court filings for further information.
Former Comptroller of Mortgage Lender Charged with Bank Fraud and Wire FraudRead the Press Release
Joon H. Kim, Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Maria T. Vullo, Superintendent of the New York State Department of Financial Services (the “DFS”), announced today the unsealing of an Indictment charging JOHN REIMER with bank fraud and mortgage fraud in connection with his participation in a scheme to defraud banks of money intended for individuals seeking loans to purchase or refinance their homes. REIMER was arrested today in Boca Raton, Florida, and was presented in U.S. District Court for the Southern District of Florida earlier today before United States Magistrate Judge James M. Hopkins.
Acting U.S. Attorney Joon H. Kim said: “As alleged, John Reimer, vice president of a mortgage bank, defrauded several other financial institutions of more than $12 million. Reimer allegedly falsified documents, kept funding for mortgages that never closed, and even acquired funding multiple times for the same loans as part of the scheme. Fraud schemes that target money intended for home loans can taint the market for honest homebuyers seeking to secure mortgages. We will continue to work with our law enforcement and regulatory partners to ensure that schemes like the one charged here are stopped.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Reimer capitalized on his knowledge of the mortgage-lending industry to exploit its vulnerabilities, causing serious damage to a number of warehouse banks fronting him an advance for the loans his bank was in the business of providing. Mortgage fraud not only affects individual victims and institutions, it risks the overall stability of the housing market, accumulating losses across the board. The FBI continues to support partnerships within the mortgage industry and law enforcement as we work together to combat this serious crime.”
Financial Services Superintendent Maria T. Vullo said: “This defendant allegedly used his position and access as a banker to obtain millions of dollars in fraudulent loans. As regulator of New York’s Financial Services industry, the Department of Financial Services is proud to have assisted the United States Attorney’s Office for the Southern District of New York in bringing this defendant to justice.”
According to the allegations made in the Indictment:[1]
REIMER, who was the vice-president and comptroller of a mortgage lending institution (the “Mortgage Bank”), participated in a scheme to defraud several financial institutions (the “Warehouse Banks”) by causing the Warehouse Banks to provide funds to the Mortgage Bank, ostensibly to fund mortgage loans for residential properties, based on false and fraudulent documentation and representations made and provided by Reimer to the Warehouse Banks.
The Mortgage Bank was in the business of providing mortgage loans for residential properties (“Loans”). Pursuant to agreements, the Warehouse Banks advanced sums of money to the Mortgage Bank so that the Mortgage Bank could fund Loans (the “Warehouse Advances”). Once a Loan closed, the Mortgage Bank typically sold the loan to an investor and used the proceeds of the sale to re-pay the Warehouse Bank for the Warehouse Advance.
In order to obtain a Warehouse Advance for a particular loan, the Mortgage Bank was required, among other things, to provide the Warehouse Bank with certain documents and information about the Loan. In addition, the notes and mortgages executed by the residential mortgagors were provided to the Warehouse Banks as collateral for the Warehouse Advances. REIMER was responsible for providing the Warehouse Banks with the information and documents necessary to obtain the Warehouse Advances.
However, according to the Indictment, with respect to certain Loans, REIMER “double-pledged” residential properties by obtaining multiple Warehouse Advances from more than one Warehouse Bank to fund the same Loan, thus misleading each Warehouse Bank into believing that the Warehouse Advance it made to the Mortgage Bank was fully collateralized.
Moreover, according to the Indictment, with respect to certain Loans, REIMER falsely represented to the Warehouse Banks that the Loans were going to close imminently, when, in fact, such Loans were not imminently closing at the time the Warehouse Advances were made. In some cases, the Loans never closed, but the Mortgage Bank nevertheless retained the Warehouse Advances made for those particular Loans. In other cases, the Loans did close, but the Mortgage Bank used those Warehouse Advances to repay other Warehouse Advances.
According to the Indictment, in furtherance of the scheme, REIMER provided the Warehouse Banks with fraudulent documents, including mortgage notes on which REIMER falsified the signatures of the purported residential mortgagors.
According to the Indictment, from November 2008 through January 2009, REIMER used fraudulent misrepresentations to cause the Warehouse Banks to wire the Mortgage Company at least over $12 million.
* * *
REIMER, 60, of Boca Raton, Florida, is charged with one count of bank fraud and one count of wire fraud, each of which carries a maximum sentence of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim thanked the FBI and DFS for their outstanding work on the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Michael D. Maimin is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as allegations.
Former Chief Financial Officer Arrested and Charged in Manhattan Federal Court with Defrauding Company of over $2 MillionRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, Special Agent in Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced today that RANDY WANG was arrested this morning on wire fraud charges stemming from his scheme to defraud his former employer, a company based in Manhattan that manages a global airline alliance whose members consisted of approximately 13 international airlines and their affiliates (the “Company”), by incurring more than $2.2 million in unauthorized charges on the Company’s credit card account, and then making changes to the Company’s accounting system to evade detection. WANG was arrested this morning in Long Island City, New York, and was presented today before United States Magistrate Judge Katharine H. Parker.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Randy Wang took advantage of his position at a major New York-based company to charge millions of dollars’ worth of non-business-related purchases on the company’s credit card. Wang allegedly purchased hundreds of electronic devices, including cell phones, computers, and tablets, and then falsified paperwork to hide the transactions. Wang allegedly tried to take his employer for a ride, but instead he may be facing a trip to prison.”
HSI Special Agent in Charge Angel M. Melendez said: “Using his position as business manager, Wang allegedly developed a scheme to defraud his employer of millions of dollars by means of unauthorized credit card purchases and altered accounting records. Twenty-five years ago, HSI New York formed the El Dorado Task Force specifically to target all levels of financial crime, including wire fraud like today’s arrest. With more than 30 local, state, and federal law enforcement partners under one roof, El Dorado continues to be a leader in financial fraud investigations, working together to bring these perpetrators to justice.”
According to the Complaint unsealed today in Manhattan federal court[1]:
During the relevant time period, WANG was employed as a business manager for the Company, and for approximately the last two months of the scheme, WANG also served as the Company’s interim chief financial officer. From January 2016 through October 2017, WANG incurred more than $2.2 million of unauthorized charges on the Company’s credit card account by making hundreds of purchases at both online and brick-and-mortar retailers. WANG’s purchases, which were entirely unrelated to his official duties and were not for the benefit of the Company, included approximately 443 laptop computers, 241 mobile electronic devices, 24 tablet computers, and numerous other electronics. In order to evade detection of his criminal conduct, WANG made changes to the Company’s accounting records to disguise the nature of the credit card charges.
* * *
WANG, 33, of Long Island City, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the court.
Mr. Kim praised the work of HSI and the El Dorado Task Force.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.
Former Administrator Pleads Guilty to Stealing $227,000 from Pettis County Ambulance DistrictRead the Press Release
JEFFERSON CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that the former administrator of the Pettis County Ambulance District pleaded guilty in federal court today to embezzling more than $227,000 from the district.
Michael Paul Gardner, 62, of Sedalia, Mo., waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Willie J. Epps, Jr., to a federal information that charges him with one count of bank fraud.
Gardner was hired as the administrator of the Pettis County Ambulance District in December 2012. By pleading guilty today, Gardner admitted that he forged board members’ signatures on 44 checks totaling $123,721. Gardner also admitted that he received $103,928 in unapproved payroll expenses from 2015 to 2017. The total amount embezzled by Gardner from the ambulance district was $227,649.
Gardner was arrested on March 29, 2017. Two board members of the ambulance district came to the Sedalia, Mo., Police Department on March 24, 2017, to present suspicious checks and financial transactions made by Gardner. The board had been notified by Central Bank of Sedalia that there was suspicious activity being conducted on the district’s bank accounts. The board members presented several ambulance district checks to police investigators in which Gardner was the payee and upon which the signatures of two board members had been forged. Board members also presented several checks made out to another person, identified in court documents as “T.R.,” which also contained forged board members’ signatures.
Gardner admitted to investigators that he had been forging board members’ signatures on checks payable to himself or to T.R., then depositing them into either his or her personal bank accounts, for about a year.
The ambulance district employed an independent auditing firm to conduct an intensive fraud investigations to determine the amount of funds misappropriated by Gardner. The firm identified 44 forged checks totaling $123,721.
Under the terms of today’s plea agreement, the government and Gardner will recommend to the court that Gardner be sentenced to two years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.This case is being prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the FBI, the Sedalia, Mo., Police Department and the Pettis County Prosecuting Attorney’s Office.
Former 22nd JDC District Attorney’s Office Investigator Pleads Guilty to Soliciting and Receiving BribesRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that MICHAEL J. COTTON, age 68, of Bogalusa, pleaded guilty yesterday to the one-count Bill of Information charging him with soliciting sexual favors from a woman in exchange for obtaining a bond reduction for her boyfriend.
According to court documents, COTTON worked as an Investigator with the Office of the District Attorney for the 22nd Judicial District, which includes St. Tammany and Washington Parishes. COTTON was responsible for investigating matters involving the issuance of bad checks, including initiating cases, reviewing records, interacting with victims, collecting fees and restitution from offenders, and obtaining warrants from municipal judges. COTTON also possessed and displayed a law enforcement badge and credentials, represented the District Attorney’s Office in interactions with criminal defendants and witnesses in ongoing law enforcement investigations, and had access to sensitive case-related information. Furthermore, COTTON regularly corresponded with, had access to, and provided case-related recommendations to Assistant District Attorneys.
Between December 28, 2013, and July 10, 2015, COTTON offered to intervene in legal proceedings and obtain favorable legal outcomes in the 22nd Judicial District, such as significant reductions in bond, for three females charged with crimes, their friends, family, and significant others who were charged with crimes in exchange for sexual favors. If females expressed reluctance, COTTON would either imply or state explicitly that he had the ability to influence the criminal justice system to exact harsher penalties against the females or their friends, families, or significant others.
In July 2015, COTTON demanded sexual favors from a 23-year-old female identified as “Victim 1” in exchange for seeking a bond reduction from $25,000 to a $30 signature bond for her boyfriend, a defendant in the Washington Parish jail.
Between December 2013 and March 2014, COTTON requested sexual favors from a 28-year-old female identified as “Victim 2” in exchange for arranging for her to retain custody of her minor children and eliminating a drug testing condition she had as the result of prior legal issues. COTTON told Victim 2 that he had strong relationships with, and possessed the power to influence, representatives of the Washington Parish Department of Children and Family Services, Judges of the 22nd Judicial District, and the then-District Attorney Walter Reed.
In January 2014, COTTON used his position as Investigator to seek and obtain a significant bond reduction for an incarcerated 23-year-old female identified as “Victim 3” with whom he had a relationship that involved sexual activity. When, in February 2014, Victim 3 sought to end her sexual relationship with him, COTTON told her that he would use his position as Investigator to influence law enforcement authorities to imprison Victim 3 if she did not resume the sexual relationship.
COTTON faces a maximum term of imprisonment of ten years, followed by up to a lifetime of supervised release, and a $250,000 fine. U.S. District Judge Ivan L.R. Lemelle set sentencing March 14, 2018.
“Mike Cotton was a profoundly corrupt member of the law enforcement community who victimized some of the most vulnerable women in Washington Parish,” stated Special Agent in Charge Eric J. Rommal of the Federal Bureau of Investigation New Orleans Field Office. “His guilty plea is an important first step toward holding him accountable for his abuses of power.”
Acting U.S. Attorney Evans praised the work of the Federal Bureau of Investigation in investigating this matter. He would also like to thank the Louisiana Department of Justice: Attorney General’s Office and the District Attorney’s Office for the 22nd Judicial District for their cooperation and assistance. Assistant U.S. Attorney Jordan Ginsberg is in charge of the prosecution.
Florida Man Indicted for Stealing ID’s and Committing Bank FraudRead the Press Release
A Florida man was indicted today on multiple counts of conspiracy, bank fraud and aggravated identity theft, announced Acting United States Attorney Daniel L. Lemisch.
Joining Lemisch in the announcement was David P. Gelios, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
Kyle Cameron, 30, of Fort Lauderdale, Florida, was charged in a 17-count indictment for his role in a bank fraud scheme executed in Michigan in 2015. Cameron is scheduled to be arraigned on December 19, 2017, 1 p.m., in Detroit. Cameron has been in federal custody since his arrest on these charges.
According to the indictment, Cameron participated with others in a bank fraud conspiracy that involved travelling to Michigan to break into homes and cars with the intent to obtain identification documents, financial transaction devices, and personal checks. Subsequent to stealing these items, Cameron and others would, using the drive-thru lane farthest from the teller window, present these records at banks, posing as the victim of the theft in order to fraudulently obtain cash from the bank.
At present, the U.S. Attorney’s Office for the Eastern District of Michigan has charged more than ten people with similar charges due to fraudulent activities in 2015 and 2016, including defendants Ja’Marri Barnes, Marlon Fencher, Kristine Carter, Justin Curry, Rhashod Brown, Cedrick Jones, Wendy Kroner, Lindsey Blackwood, Tedgrick Montgomery, and Dennis Jones. According to information provided at a December 13, 2017, detention hearing for defendant Dennis Jones, the banking industry has referred to the defendants who use this bank fraud scheme as the “Felony Lane Gang” due to their repeated usage, in order to avoid detection, of the drive-thru lane farthest from the teller window. The detention hearing also revealed that the defendants are known to target the personal identification documents and bank records of women. When pursued, the defendants routinely recklessly flee, both by car and on foot.
“Given the random nature of this crime, and especially during the holiday season, our community needs to be careful to lock doors and to not let purses and bags be viewable through a car window,” Lemisch said. “We applaud the dedication of our federal law enforcement partners in the Federal Bureau of Investigation for their aggressive investigation of this unsettling crime.”
“The brazen criminal scheme described in today’s indictment should serve as a reminder to everyone that identity theft and other financial related crimes are not just committed by high-tech cyber thieves hiding behind the relative anonymity of their computer screens,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “As evidenced by the home burglaries which could have resulted in harm to homeowners, the public must remain vigilant in protecting your homes and personal information from would-be-criminals. If you or someone you know has fallen victim to identify theft, contact your local law enforcement agency or visit www.identitytheft.gov.”
Bank fraud is punishable with a maximum penalty under federal law of 30 years’ imprisonment and a $1,000,000 fine; aggravated identity theft requires a mandatory penalty of 2 years’ imprisonment.
An indictment is only a charging document and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This investigation, which began in 2015, was led by the FBI’s Detroit Identity Theft and Financial Crimes Task Force, which is comprised of federal and local agencies, including an officer from the Auburn Hills Police Department. The case is being prosecuted by Assistant U.S. Attorneys Patrick E. Corbett and Craig A. Weier.
Federal, State, and Local Law Enforcement Partners Conduct Multi-Defendant TakedownRead the Press Release
Spokane– Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that earlier today Federal, state, and local law enforcement conducted a large-scale enforcement action targeting a criminal conspiracy distributing methamphetamine in the Eastern District of Washington, Idaho, and Montana. Hundreds of law enforcement officials, including federal agents and state and local officers executed Federal search warrants in Spokane, Washington; Moses Lake, Washington; Mattawa, Washington; and in North Idaho. This enforcement action resulted in the arrest of approximately 20 individuals, the seizure of approximately 75 firearms, and approximately eight pounds of methamphetamine.
This enforcement action stems from a Federal Indictment that was handed down in the Eastern District of Washington in December, 2017. The Indictment charges numerous individuals with a conspiracy to distribute methamphetamine from on or about September, 2016 through December, 2017. An Indictment Contains Allegations That an Individual Has Committed a Crime. Every Individual is Presumed Innocent Until Proven Guilty beyond a Reasonable Doubt.
Today’s enforcement action is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes. This OCDETF investigation is being conducted by the Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives.
Agencies participating in the enforcement operation today were Drug Enforcement Administration – Spokane District Office; Bureau of Alcohol, Tobacco, Firearms, and Explosives; United States Border Patrol; Spokane Police Department; Homeland Security Investigations; United States Marshal Service; Federal Bureau of Investigation; Spokane Regional Safe Streets Task Force; and Interagency Narcotics Enforcement Team.
James A. Goeke and David Herzog, Assistant United States Attorneys for the Eastern District of Washington, are prosecuting this case.
Federal Jury Convicts Former Sheriff’s Deputy on Three Counts, including Solicitation to Tamper with a WitnessRead the Press Release
Memphis, TN – After eight days of trial before U.S. Senior District Judge Samuel H. Mays, a federal jury convicted Jeremy Drewery of one count of Hobbs Act Extortion; one count of Receipt of a Bribe by a Government Agent; and one count of Solicitation to Tamper with a Witness. United States Attorney D. Michael Dunavant announced the guilty verdict today.
Jeremy Drewery, 42, of Arlington, Tennessee, was indicted last September for attempting to extort thousands of dollars from an alleged drug dealer in August of 2016. In July, additional charges were added to the indictment, which alleged that the defendant solicited a person to kill the witness in the extortion case.
United States Attorney D. Michael Dunavant said: "Official misconduct and corruption by law enforcement officers in positions of trust and authority undermine the foundational integrity of our government institutions. We must root out, expose, and hold accountable those officials who violate the public trust by corrupt acts of extortion, bribery, and witness tampering, and this verdict does just that."
Drewery was assigned to the Shelby County Sheriff’s Office’s Narcotics Division at the time of these events, but has since been terminated from the department. The evidence at trial showed that after executing a search warrant on the home of an alleged drug dealer, Drewery demanded money from the man. In exchange, Drewery would not institute a criminal case on the man. The alleged drug dealer contacted the FBI, which began an investigation. Over the course of three weeks, Drewery met with the alleged drug dealer and received a total of $8,000. Each of the meetings and numerous phone calls between Drewery and the alleged drug dealer were recorded.
"Law enforcement corruption undermines the public trust and can threaten the overall safety of our community," said Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the Federal Bureau of Investigation. "The FBI holds, as one of its highest priorities, the investigation of corrupt members of law enforcement. This conviction is the result of the hard work and diligence of the honest law enforcement officers and agents of the Tarnished Badge Task Force, who like the overwhelming majority of law enforcement officers, put their lives on the line day in and day out to protect, serve, and maintain public trust."
The evidence at trial also showed that, after Drewery’s arrest on the attempted extortion, he paid a confidential informant $2,000 to solicit a person to kill the alleged drug dealer.
Sentencing is scheduled for Friday, March 30, 2018, before U.S. Senior District Judge Mays. Drewery faces up to 20 years in federal prison and a fine of up to $250,000.
This case was investigated by the Tarnished Badge Task Force, which is comprised of investigators from the FBI, Memphis Police Department and the Shelby County Sheriff’s Office.
Assistant U.S. Attorneys Reagan M. Taylor and Mark Erskine are prosecuting this case on the government’s behalf.
Explo co-owner pleads guilty to conspiracy, false statement chargesRead the Press Release
SHREVEPORT, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that the co-owner of Explo Systems Inc. pleaded guilty to conspiracy and false statements concerning the storage of munitions at Camp Minden that led to an explosion.
Explo co-owner David Alan Smith, 62, pleaded guilty before U.S. Magistrate Judge Mark Horsnby to one count of criminal conspiracy and one count of making a false statement. The plea will become final when accepted by U.S. District Judge Elizabeth E. Foote.
Explo Systems Inc. is a private company whose primary business operations involved the demilitarization of military munitions and the subsequent resale of the recovered explosive materials for mining operations. According to the guilty plea, the U.S. Army awarded Explo a contract on March 24, 2010 to dispose of 450,000 155 mm artillery propelling charges designated as M119A2 for $2,902,500. The Army and Explo officials later amended the contract on March 6, 2012 to dispose of 1,350,000 charges for $8,617,500. The contract required Explo to properly store and dispose of the demilitarized M6. The contract also required Explo to document the sale of the demilitarized M6 by completing an End User Certificate (EUC). On the EUC, the purchaser of the demilitarized M6 certified the purchase and compliance with applicable federal laws. Once the EUCs were certified, Explo submitted the EUCs to the Army.
On October 15, 2012, an explosion occurred at a munitions storage igloo on Camp Minden. The explosion contained approximately 124,190 pounds of smokeless powder and a box van trailer containing approximately 42,240 pounds of demilitarized M6. The damage destroyed the igloo and trailer, shattered windows of dwellings within a four-mile radius, and derailed 11 rail cars near the storage igloo.
As part of the guilty plea, Smith agreed that he conspired with others to defraud the United States by impeding federal, state and local authorities from properly monitoring the operations at Explo’s Camp Minden facility. Smith also agreed that he conspired with others to submit false end use certificates in order to obtain money to which he was not entitled.
Smith faces five years in prison, three years of supervised release and a $250,000 fine for each count. As part of the plea agreement, Smith agreed that he owes restitution in the amount of $35,398,761.
The Environmental Protection Agency-Criminal Investigation Division, U.S. Army Criminal Investigation, Department of Defense Criminal Investigative Service, FBI and the Louisiana State Police-Emergency Service Unit investigated the case. Assistant U.S. Attorney Earl M. Campbell is prosecuting the case.
Elmira Man Pleads Guilty to Child Pornography ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Howard Edward Brooks, 40, of Elmira, NY, pleaded guilty to receipt, attempted distribution, and four counts of possession of child pornography involving prepubescent minors before U.S. District Court Judge David G. Larimer. Receipt and attempted distribution of child pornography each carry a mandatory minimum penalty of five years in prison with a maximum of 20 years, while each count of possession of child pornography involving prepubescent minors is punishable by up to 20 years in prison. Each charge also carries a fine of up to $250,000.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that Brooks, a former teacher at the Elmira Christian Academy, was arrested in August of 2015 following the execution of a federal search warrant at his Elmira residence. During that search, FBI Agents found several digital items containing photos and videos of children as young as toddlers being raped.
When FBI Agents arrived to execute the search warrant, Brooks tried to flush several thumb drives down the toilet. The defendant stated that he did so because he saw the FBI in his driveway and knew the thumb drives contained child pornography. However, the thumb drives were recovered from the sewer under Brooks’ residence with the assistance of the Chemung County Department of Public Works. Those thumb drives were then forensically analyzed and hundreds of child pornography videos were recovered from each.
The plea is the culmination of an investigation by the Federal Bureau of Investigation Child Exploitation Task Force, under the direction of Special Agent-in-Charge Adam S. Cohen.Sentencing is set for May 8, 2018, at 11:30 a.m. before Judge Larimer.
Elk Grove Man Sentenced to 20 Years in Prison for $1M Adult Adoption Immigration Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Helaman Hansen, 65, of Elk Grove, was sentenced today to 20 years in prison by U.S. District Judge Morrison C. England Jr. for operating an elaborate adult-adoption fraud scheme that targeted undocumented aliens, U.S. Attorney Phillip A. Talbert announced. Judge England also ordered Hansen to pay $576,264 in restitution.
On May 9, 2017, after an 11-day trial, a federal jury found Hansen guilty of 12 counts of mail fraud, three counts of wire fraud, and two counts of encouraging and inducing illegal immigration for private financial gain.
U.S. Attorney Talbert stated: “The sentence today acknowledges the vast number of people victimized by the defendant. He preyed upon hundreds of people who wanted to find a pathway to American citizenship and exploited their hopes and dreams for his own financial gain. The defendant’s lies and false promises caused many to part with substantial amounts of money, and in some instances, a lifetime’s worth of savings. I want to thank our federal partners at ICE’s Homeland Security Investigations and the FBI for their hard work in bringing the defendant justice.”
“Today’s decision should send a clear message to anyone who chooses to take advantage of innocent victims who are only trying to make a better life for themselves,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “HSI continues to work closely with our law enforcement partners to seek out and arrest opportunistic swindlers who misrepresent our nation’s immigration laws for their own personal gain.”
“The FBI is committed to identifying and investigating fraud, especially when such crimes prey upon the most vulnerable people in our community. Legitimate pathways to citizenship for undocumented immigrants exist but adult adoption is not one of them. Unfortunately, Hansen knowingly accepted funds for adult adoption processes despite being informed that such would not aid his victims with obtaining citizenship,” said Special Agent in Charge Sean Ragan of the Federal Bureau of Investigation’s Sacramento Field Office.
According to evidence presented at trial, between October 2012 and January 2016, Hansen and others used various entities such as Americans Helping America (AHA) to sell memberships in what he called a “Migration Program.” A central feature of the program was the fraudulent claim that immigrant adults could achieve U.S. citizenship by being legally adopted by an American citizen and completing a list of additional tasks. At first, memberships were sold for an annual fee of $150, but that fee grew and eventually was as high as $10,000.
Although some victims completed the adoption stage of the “Migration Program,” not one person obtained citizenship. As early as October 2012, Hansen had been informed by the U.S. Citizenship and Immigration Services that aliens adopted after their 16th birthday could not obtain citizenship in the manner Hansen was promoting. Despite that notification, Hansen and others acting at his direction induced approximately 500 victims to pay more than $1 million to join the fraudulent program.
This case was the product of an investigation by the Federal Bureau of Investigation and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorneys André M. Espinosa and Katherine T. Lydon prosecuted the case.
Eastern Panhandle man admits to heroin and cocaine distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – A Kearneysville, West Virginia man has admitted to his role in a drug distribution operation, United States Attorney Bill Powell announced.
Gerald Gibbs, age 29, pled guilty to one count of “Conspiracy to Distribute a Controlled Substance.” Gibbs admitted to conspiring to distribute 100 grams or more of heroin and 28 grams or more of cocaine. The crime took place from June 2016 to March 2017 in Jefferson County, West Virginia.
Gibbs faces up to 40 years incarceration and a fine of up to $5,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Robert W. Trumble presided.
Drug Trafficker Sentenced in Brooklyn Federal Court to 97 Months’ Imprisonment for Distributing FentanylRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Johnnie Monroe, also known as “Nut,” was sentenced by United States District Judge Brian M. Cogan to 97 months’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release. The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015. Judge Cogan also ordered forfeiture in the amount of $150,000.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“The death of a woman in West Virginia after ingesting fentanyl pills distributed by defendant Johnnie Monroe did not deter him from shortly thereafter shipping another package of pills containing fentanyl to West Virginia,” stated Acting United States Attorney Rohde. “Today’s sentence holds Monroe accountable for contributing to the deadly opioid epidemic facing this country. This Office, together with our law enforcement partners, will continue to identify and prosecute those who contribute to and would seek to profit from this epidemic. Through these efforts, lives will be saved by reducing the availability of opioids and preventing new addictions.”
“There are no words to express our sorrow for lives lost as a result of drug overdose; but DEA strives to bring justice to the victims’ families by identifying those responsible for distributing the poison,” stated DEA Special Agent in Charge Hunt. “Heroin and fentanyl are poison and have been the cause of record breaking numbers of overdoses throughout the U.S. This sentencing is a reminder that DEA and our law enforcement partners will continue to investigate opioid trafficking organizations and put them in jail.”
According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50. Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA. The recent rise in overdose deaths has been driven in large part by fentanyl—a drug that has been described as 50 to 100 times more potent than morphine. Opioids have been a particular problem in West Virginia, where the defendant and his co-conspirators trafficked substantial amounts of fentanyl. One of the victims of these trends was a young mother, who Monroe and his co-conspirators believed they killed with their fentanyl pills. Upon learning of the young mother’s death, Monroe was intercepted over a judicially authorized wiretap stating, “The girl went out.” When a co-conspirator asked Monroe what he meant by “went out,” Monroe left no ambiguity that a young woman had overdosed: “Went out! OD, OD!” Nonetheless, two weeks later, Monroe mailed another package containing hundreds of pills containing fentanyl to a co-conspirator in West Virginia.
According to the government’s sentencing memorandum, the defendant traveled to West Virginia to sell fentanyl, and, in addition, supplied a significant amount of the crack cocaine that was sold by street-level dealers in the Queensbridge community. The defendant himself sold crack on 20 separate occasions in deals monitored by the NYPD. The defendant also agreed to commit an armed robbery of an individual believed to be traveling with $110,000, and went to a bus station in Manhattan to look for the individual. The failed robbery plot was not for a lack of effort—the targeted victim never arrived. The next day, Monroe was intercepted over a wiretap bragging to a co-conspirator that they were in position, armed and ready to commit the robbery: “We had biscuits [i.e., firearms], stun guns . . . we would a taken him down.”
On December 5, 2017, co-defendant Edward Carrillo was sentenced to 126 months’ imprisonment for the same charge of conspiring to distribute fentanyl. For conspiring to distribute crack-cocaine in Queensbridge, co-defendant Terrell Carmichael was sentenced on November 16, 2017 to 51 months’ imprisonment and co-defendant Kyle Williams was sentenced on December 12, 2017 to 42 months’ imprisonment. Three additional co-defendants are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution.
Defendant Sentenced Today:
JOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New YorkDefendants Previously Sentenced:
TERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New YorkEDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New YorkKYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New YorkDefendants Awaiting Sentencing:
LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West VirginiaDARRYL KNOWLES
Age: 29
Bronx, New YorkMICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New YorkE.D.N.Y. Docket No. 16-CR-617 (BMC)
District Man Sentenced to Eight Years in Prison for Two Shootings in Southeast WashingtonRead the Press Release
WASHINGTON – Randy Sparrow, 31, of Washington, D.C., was sentenced today to eight years in prison on charges stemming from two shootings that occurred in Southeast Washington within a 48-hour period last summer, U.S. Attorney Jessie K. Liu announced.
Sparrow pled guilty in September 2017, in the Superior Court of the District of Columbia, to one count of unlawful possession of a firearm based on a prior conviction for a crime of violence and one count of felony assault on a police officer while armed. The plea, which was subject to the Court’s approval, called for an agreed-upon sentence of eight years in prison, consisting of two consecutive statutory mandatory minimum terms in prison. The Honorable Marisa Demeo accepted the plea and sentenced Sparrow accordingly. Following the prison term, Sparrow will be placed on five years of supervised release.
According to the government’s evidence, the first of the two shootings took place on July 8, 2017. At approximately 2:35 a.m., Sparrow, who was driving a green and black Ford Crown Victoria, chased the victim, who was driving a separate car, through various locations in Southeast Washington. As Sparrow pursued the victim, he shot at him multiple times with a firearm, striking him once in the left arm. Sparrow and the victim had met in jail approximately six or seven years ago and were with two different groups inside the jail that did not get along. Sparrow was convicted of armed robbery in 2004.
The second shooting took place on July 10, 2017. At approximately 2:05 a.m., in the 1900 block of Savannah Street SE, officers with the Metropolitan Police Department (MPD) came into contact with Sparrow during the stop and subsequent arrest of an individual that Sparrow referred to as his “little brother.” After Sparrow became upset and tried to interfere, MPD officers placed him in handcuffs, which were later removed. At approximately 2:20 a.m., four of the MPD officers left the location in an unmarked police vehicle and drove eastbound on Savannah Street SE. Sparrow followed them in a green and black Ford Crown Victoria and fired multiple shots at the officers with a firearm, striking their vehicle at least once. Sparrow then made a U-turn and fled in the opposite direction. He ran a red light, hit another vehicle at the intersection of Stanton Road SE and Alabama Avenue SE, and crashed into a tree in front of a school in the 3200 block of Stanton Road SE. Sparrow fled the vehicle and block on foot, leaving behind a Glock 19, 9mm handgun. He was arrested later that morning.
In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department (MPD). She also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Tiffany Fogle, Victim/Witness Advocate Jennifer Allen, and Witness Security Specialists Debra Cannon and Tanya Via. Finally, U.S. Attorney Liu commended Assistant U.S. Attorney Natasha Smalky, who investigated and prosecuted the case.
Denver Man Sentenced to Long Prison Term for Being a Felon in Possession of Firearms, Mail Theft, Bank Fraud, and Aggravated Identity TheftRead the Press Release
DENVER – Delano Medina, age 34, of Denver, Colorado, was sentenced earlier this week by U.S. District Court Judge Philip A. Brimmer to serve 153 months (over 12 years) for being a felon in possession of firearms, mail theft, bank fraud, and aggravated identity theft, U.S. Attorney Bob Troyer and Acting Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service Nicole Davis announced. Medina, who appeared at the sentencing in custody, was remanded at the conclusion of the hearing. The defendant was also ordered to pay $157,014.13 in restitution to victims.
Medina pled guilty to two counts of possession of a firearm by a previously convicted felon, one count of theft of mail, one count of bank fraud, and two counts of aggravated identity theft.
According to court documents, including the stipulated facts contained in the plea agreement, between approximately April 1, 2013, and December 5, 2014, the defendant committed mail theft and bank fraud. The scheme to defraud and obtain money started with the defendant stealing outgoing mail from victims’ mailboxes. He focused on mail boxes that had the red flag raised, meaning there was outgoing mail to be picked up by the postal carrier. That mail contained victims’ personal identification information as well as financial information. Based on the stolen information accumulated from multiple victims, counterfeit checks and false identifications reflecting hybrid information from those victims were created. The defendant and others at his direction tendered counterfeit checks to a variety of retail operations for the purchase of consumer goods, especially electronics. The defendant and others then at times returned these goods to retailers in exchange for cash, or in some limited cases, in store credit. Medina conducted this scheme through numerous states, stealing mail in Colorado and then using the stolen information in Colorado as well as Nebraska, Arizona, Iowa, Texas and elsewhere.
Medina used a stolen identification to purchase a 9 mm firearm from a Cabela’s in Thronton, Colorado. He was prohibited from purchasing and possessing the firearm due to prior convictions of multiple felonies. Law enforcement ultimately recovered three firearms that the defendant admits he possessed. They were a Sturm Ruger 9 mm pistol, a Smith and Wesson 9 mm pistol, and a Browning .380 pistol. Two of the three firearms recovered from the defendant were involved in two shootings in the Denver Metro area. The defendant is currently in the Colorado Department of Corrections serving a 44-year sentence for using the firearm purchased at Cabelas in a shooting.
On December 5, 2014, defendant Medina was arrested at the Cherry Creek Mall when he attempted to purchase a watch with fraudulent identification. A search of his vehicle found that it contained numerous items related to mail theft, check fraud, and identity theft.
“This case is a good reminder, especially during the holiday season, that people need to watch out for each other to stop potential theft of mail and other crimes,” said U.S. Attorney Bob Troyer. “If you see something suspicious, please report it.”
“This case demonstrated how Postal Inspectors work with local police agencies across numerous jurisdictions to build a successful federal prosecution,” said Nicole Davis, Acting Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service. “The stiff sentence handed down in this case serves as a reminder of the potential penalty for violating the public’s trust in the U.S. mail.”
This case was investigated by the United States Postal Inspection Service with assistance from the Lincoln, Nebraska Police Department, the Lone Tree Police Department, and the Grand Junction Police Department.
This case was prosecuted by Assistant U.S. Attorneys Kurt Bohn and Hetal Doshi.
Davita Rx Agrees to Pay $63.7 Million to Resolve False Claims Act AllegationsRead the Press Release
DALLAS – DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today. DaVita Rx is based in Coppell, Texas.
The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent. In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute. Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card. These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.
“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas. “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”
DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit. DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement. In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement. The Medicaid program is jointly funded by the federal and state governments.
“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler. “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.”
“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”
The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.). The relators will receive roughly $2.1 million from the federal recovery.
The settlement 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 800-HHS-TIPS (800-447-8477). HHS also offers several programs for health care providers to self-report potential fraud. More information on self-disclosure processes can be found on the HHS-OIG website.
The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas. The claims asserted by the government are allegations only and there has been no determination of liability.
Assistant U.S. Attorney Lisa-Beth C. Meletta handled this matter for the U.S. Attorney’s Office.
# # #Daly City Resident Sentenced to 108 Months in Prison for Receipt of Child PornographyRead the Press Release
SAN FRANCISCO – Ryan Recaido Patacsil was sentenced to 9 years in prison for receipt of child pornography, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down yesterday by the Honorable Maxine M. Chesney, U.S. District Judge, following Patacsil’s guilty plea to the charge on August 2, 2017.
According to his guilty plea, Patacsil, 40, of Daly City, California, admitted to using peer-to-peer software to access and download child pornography, including images of minors younger than 12 years old and portrayals of sexual abuse or exploitation of an infant or toddler. Patacsil acknowledged that he knowingly possessed numerous digital files that contained depictions of minors engaged in sexually explicit conduct on a variety of digital devices he kept in his home. Patacsil also admitted that the software he used to access and download child pornography on the internet also allowed other people to download the pornography from his computer. Patacsil acknowledged he possessed more than 600 images constituting child pornography.
On April 11, 2017, a federal grand jury returned a superseding indictment charging Patacsil with one count each of possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B), and receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2)(B) and (b)(1). Pursuant to his guilty plea, Patacsil pleaded guilty to the receipt charge, and the possession charge was dismissed.
In addition to the prison term, Judge Chesney ordered Patacsil to serve a 7-year period of supervised release to follow his custodial sentence. Patacsil has been in custody since his arrest in February 2017, and he will begin serving the sentence immediately.
Assistant U.S. Attorney Andrew F. Dawson is prosecuting the case with the assistance of Wincy Wong and Marina Ponomarchuk. The prosecution is the result of an investigation by the FBI.
DaVita Rx Agrees to Pay $63.7 Million to Resolve False Claims Act AllegationsRead the Press Release
DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today. DaVita Rx is based in Coppell, Texas.
The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent. In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute. Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card. These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.
“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler. “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.”
DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit. DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement. In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement. The Medicaid program is jointly funded by the federal and state governments.
“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas. “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”
“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”
The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.). The relators will receive roughly $2.1 million from the federal recovery.
The settlement 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 800-HHS-TIPS (800-447-8477). HHS also offers several programs for health care providers to self-report potential fraud. More information on self-disclosure processes can be found on the HHS-OIG website.
The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas. The claims asserted by the government are allegations only and there has been no determination of liability.
Connecticut man indicted for distributing heroinRead the Press Release
A federal grand jury returned a one-count indictment charging Reynaldo Diaz-Guzman, 25, of Hartford, Conn., with possession with the intent to distribute heroin, said U.S. Attorney Justin E. Herdman, United States Attorney for the Northern District of Ohio.
The indictment alleges that on or about November 14, 2017, Diaz-Guzman possessed with the intent to distribute more than 1,000 grams of heroin.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Ohio State Highway Patrol and the Drug Enforcement Administration. The matter is being prosecuted by Assistant U.S. Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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Colorado Stock Transfer Agent and California Securities Attorney Charged with Conspiracy to Unlawfully Sell Unregistered SecuritiesRead the Press Release
A Colorado registered stock transfer agent and a California securities attorney were charged with conspiracy to unlawfully sell unregistered securities in connection with a scheme to fraudulently register shell companies with the U.S. Securities and Exchange Commission (SEC), issue a class of free-trading shares in the companies that the conspirators secretly controlled, and sell the shares to the investing public at a profit. To date, twelve defendants have been charged in connection with the Shell Factory Fraud investigation.
Randy A. Hummel, Executive Assistant United States Attorney, U.S. Attorney’s Office for the Southern District of Florida, Andrew W. Vale, Assistant Director in Charge, Federal Bureau of Investigation (FBI), Washington Field Office, and Robert F. Lasky, Special Agent in Charge, FBI Miami Field Office, made the announcement.
John Ahearn, 56, of Erie, Colorado and formerly of Miller Place, New York, and Andrew H. Wilson, 69, of Nevada City, California, were charged by criminal information with one count of conspiracy to unlawfully sell unregistered securities, in violation of Title 15, United States Code, Sections 77e(a)(1), 77e(a)(2), and 77x, and Title 17, Code of Federal Regulations, Section 230.144, all in violation of 18 U.S.C. § 371, in Case No. 17-20883-CR-KMW. The case is assigned to U.S. District Judge Kathleen M. Williams in Miami. Each defendant faces a maximum statutory sentence of five years in prison and a fine up to $250,000 or double the proceeds of the offense.
Ten defendants were previously charged in connection with the Shell Factory Fraud investigation: James Schneider, Case No. 17-20712-CR-FAM; Myron Gushlak and Yelena Furman, Case No. 17-20713-CMA; David Lubin, Case No. 17-20508-CR-MGC; Sheldon Rose and Ian Kass, Case No. 16-20706-CR-JEM; Steven Sanders and Alvin Mirman, Case No. 16-20572-CR-CMA; and Daniel McKelvey and Jeffrey Lamson, Case No. 16-20546-CR-RNS.
According to court documents, from early 2007 through at least 2014, Sanders, McKelvey, Lubin and other conspirators would fraudulently create public companies, known as issuers, by filing documents with the SEC that falsely described the the companies and their share ownership. These documents would indicate that the companies were controlled by a nominee, or straw chief executive officer (CEO). The straw CEO would be listed as the owner of the control block, or restricted shares, but in reality the companies were controlled by the principals. The principals would also create documents with the names of various shareholders for each company, to make it appear that these shares were owned by persons unaffiliated with the company. These shares would later be classified as unrestricted or “free trading.” Thereafter, the principals would sell the companies to criminal actors who would secretly obtain the control shares and the purported “free trading” shares, without disclosure to the SEC or the investing public. This would allow the buyers to engage in stock manipulation schemes using the purported “free trading” shares. According to the information, Ahearn and Wilson, both securities industry professionals, joined in the conspiracy in order to unlawfully obtain fees and future business from the issuers.
According to the information, Ahearn was the owner of Manhattan Transfer Registrar Co. (“Manhattan Transfer”), a stock transfer agent with offices in New York and Colorado. Ahearn specialized in penny stock transfer services, and was responsible for keeping track of the status of shares (restricted or free trading) as well as share ownership. Ahearn and Manhattan Transfer became the stock transfer agent for Entertainment Art, Inc. (“EERT”) in 2008, and became aware that the shares were listed in the names of straw shareholders but were in fact controlled by the principals. During the conspiracy, according to the information, Ahearn agreed to assist Sanders, McKelvey and Lubin with transferring the shares of issuers they controlled, knowing that these shares were unlawfully classified as unrestricted. By 2012, EERT was secretly controlled by Myron Gushlak, who was serving a federal prison sentence for a separate pump and dump scheme. In approximately October 2012, Ahearn assisted with the unlawful transfer of the EERT shares to certain shell buyers, who changed the name to Biozoom, Inc. (“BIZM”) and, in May 2013, used the BIZM shares for a massive pump and dump stock swindle. Ahearn assisted Sanders and McKelvey with stock transfer services with other issuers as well, for shares that Ahearn knew were secretly controlled by Sanders and McKelvey but were listed in the names of various nominee shareholders.
Wilson, according to the information, was an attorney licensed to practice law in California who authored false and fraudulent legal opinion letters for EERT, as well as certain other issuers at the request of Sanders and McKelvey. These letters falsely stated that shares of the companies were owned by persons who were not “affiliates,” and were used by persons who acquired the shares to deposit them with brokers and unlawfully them to the investing public. In reality, Wilson took his direction from Sanders and McKelvey, whom Wilson came to learn secretly controlled the companies. In certain instances, Wilson performed so-called escrow services for the sale of shares, knowing that these share sales were part of the unlawful sale of all or nearly all of the shares of the companies but without the required disclosure to the SEC and the investing public. The actions of Ahearn and Wilson, along with their conspirators, allowed the shares of the companies to be utilized for pump and dump stock swindles or other manipulation schemes.
Mr. Hummel commended the investigative efforts and coordination of the FBI’s Washington Field Office and Miami Field Office. Mr. Hummel also thanked the SEC’s Miami Regional Office and Washington Home Office for their assistance. The SEC previously filed parallel civil enforcement actions against McKelvey, Sanders, Mirman, Rose, Kass, Lubin, Schneider, Lamson and Wilson. This matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
An criminal information merely contains allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Cleveland men indicted for carjacking and attempted armed robbery of Willoughby credit unionRead the Press Release
Two Cleveland men were indicted for their crimes related to a carjacking and attempted armed robbery of a credit union in October, said U.S. Attorney Justin E. Herdman and FBI Special Agent in Charge Stephen D. Anthony.
Arvis Williams, Jr., 22, and Melvin R. Hill, 21, are charged with attempted armed credit union robbery and use of a firearm in furtherance of a crime of violence. Williams was also charged with carjacking and use of a firearm in furtherance of a crime of violence.
Williams and Hill used a firearm in an effort to rob the Willoughby Eastlake Schools Credit Union on Second Street in Willoughby on Oct. 11, 2017. On the same day, Williams used a firearm to carjack at 2015 Chevy Cruze, according to the indictment.
Each charge of use of a firearm in furtherance of a crime of violence carries a minimum consecutive term of five years in prison if a firearm was possessed, seven years in prison if a firearm was brandished, and a consecutive 25 years in prison for each subsequent conviction.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Brian M. McDonough following an investigation by the FBI Cleveland Violent Crimes Task Force and the Willoughby Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.